Nigerian rates on hold as elections muddy the waters

The Central Bank of Nigeria (CBN) kept interest rates on hold at 12.0% today in what was Godwin Emefiele’s first meeting as governor. Looking ahead, rising inflation suggests that policy tightening is needed, but this is unlikely to occur until after next year’s general election. For now, we expect interest rates to stay on hold over the next six months, but political pressures mean the near-term risks are skewed towards rate cuts.