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Again, Nigeria’s central bank raises interest rate amid inflationary pressure

Published

2 weeks ago

November 27, 2024

Nigeria’s central bank hiked its benchmark interest rate for the sixth time this year on Tuesday, citing inflationary and currency rate pressures in Africa’s most populous nation.

The Monetary Policy Rate was raised by 25 basis points to 27.50%, bringing the year’s total rises to 875 basis points. On Tuesday, most Reuters economists projected additional policy tightening.

In October, inflation increased for the second consecutive month to 33.88% in annual terms (NGCPIY=ECI), starting a new chapter in the nation’s most severe cost-of-living crisis in decades.

Olayemi Cardoso, governor of the Central Bank of Nigeria, stated that prolonged pressure on the naira currency was concerning and that food and energy costs were major causes of the increase in inflation.

“Members therefore agreed unanimously to remain focused in addressing price developments,” he told a news conference in the capital Abuja.

According to Cardoso, the central bank is dedicated to the “war against inflation” and anticipates that the first quarter of 2025 will see the full impact of its tightening measures.

“It’s also important for people to understand that there’s a time lag between when you implement policies and when they have an impact,” he said.

President Bola Tinubu’s actions to reduce energy and petrol subsidies and weaken the naira last year have increased price pressure.

Although the growth rate is still well behind Tinubu’s objective of 6%, such actions are intended to boost economic growth and strengthen public finances in Africa’s largest oil producer.

Although it did not anticipate rate reduction until the second quarter of next year, Capital Economics stated in a research note following Tuesday’s raise that it believed Nigeria’s tightening cycle was finished.

A stable naira would be essential for controlling inflation, according to Razia Khan of Standard Chartered, and more rises would not be necessary if the central bank was able to achieve currency stability.

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Egypt’s November inflation drops to 25.5%, near 2-year low

Published

1 day ago

December 11, 2024

Ifeoluwa Dada

According to figures released Tuesday by statistics agency CAPMAS, Egypt’s annual urban consumer price inflation rate fell more than anticipated to 25.5% in November, the lowest level since December 2022.

Following the Russian invasion of Ukraine, which caused international investors to pull billions of dollars out of Egyptian treasury markets, inflation started to rise sharply in early 2022.

In September 2023, headline inflation reached a record high of 38.0%. It dropped to 26.5% by October 2024.

In a Reuters survey last month, 15 economists’ consensus prediction was for annual inflation to gradually decline to 26.4%.

According to CAPMAS statistics, headline inflation decreased from 1.1% in October to 0.5% in November every month.

Compared to October, when they fell 1.1%, food costs fell 2.8% over the month, making them 23.3% more than they were a year ago.

An increase in the money supply has been a major contributor to inflation. According to central bank data, Egypt’s M2 money supply increased by 29.54% in October compared to the same month last year.

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Nigeria creates N20bn consumer credit fund for domestic automakers

Published

3 days ago

December 9, 2024

Ifeoluwa Dada

In an attempt to increase demand for cars built domestically, the Nigerian government has established a N20 billion consumer credit facility programme.

The goal of the programme, which is run by the Nigerian Consumer Credit Corporation (Credicorp), is to keep customer interest rates to single digit.

The fund aims to remove obstacles that consumers face when purchasing cars on credit, according to Credicorp Managing Director/CEO Engr. Uzoma Nwagba, who spoke at the official launch/agreement signing between Credicorp and the National Automotive Design and Development Council (NADDC) in Abuja.

Nwagba said that the credit economy contributed to the creation of jobs and wealth for Nigerians as well as to the enhancement of residents’ quality of life.

According to him, the government is dedicated to helping the industry in order to guarantee its expansion and survival. According to him, the N20 billion fund was only the start, and if the initial support proves effective, the government intends to create a larger fund.

Earlier, Mr. Joseph Osanipin, the Director General of NADDC, stated that the industry’s expansion depends on the demand side of the car market being improved.

According to Osanipin, credit programs enable consumers to acquire brand-new cars of their choosing, but in the majority of prosperous nations, people do not pay cash for cars and other autos.

According to him, the program, which covers all types of autos such cars, vans, tricycles, and motorbikes, is available to all Nigerians and involves automakers that produce or assemble their goods entirely domestically.