Nigeria: rate hike risks easing, FX rules surprise

Policymakers in Nigeria kept their benchmark rate on hold at 11.50% at today’s MPC meeting and, if we’re right in expecting the economic recovery to disappoint, policy settings are likely to remain unchanged for some time. Meanwhile, the announcement on changes in foreign exchange provision reaffirms our view that Nigeria’s heavily controlled FX system is not going anywhere either.
Virag Forizs Emerging Markets Economist
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Africa Economics Weekly

‘BIG’ push in SA, FX distortions in Nigeria, tourism woes

Momentum behind proposals for a basic income grant (BIG) in South Africa appear to be building, suggesting that the authorities are leaning towards providing more fiscal support. Elsewhere, Nigeria’s unorthodox foreign exchange policy seems to be disrupting activity but the chances of policymakers reversing course are very low. Finally, a recent virus wave in the highly-vaccinated island nation of Mauritius has dampened its recovery prospects, but other tourism-dependent economies in Africa will probably fare even worse.

17 September 2021

Africa Economics Update

CBN maintains interest rates and disruptive FX rules

Policymakers in Nigeria kept their benchmark rate on hold at 11.50% at today’s MPC meeting and will probably continue to do so over 2021-23. And the central bank’s insistence on maintaining a strong currency using disruptive foreign exchange rules is likely to come at an increasingly high economic cost.

17 September 2021

Africa Economics Update

SA to struggle to get back on economic feet after July hit

South Africa’s hard activity data for July underscored the severe blow to the retail and manufacturing sectors from violent unrest and tighter virus restrictions. While much of the hit has probably unwound more recently, weak growth momentum increases the risk of a contraction in GDP over Q3 as a whole.

15 September 2021

More from Virag Forizs

Africa Economics Weekly

Vaccines and variants in SSA, post-unrest fallout in SA

A boost to vaccine supplies in Sub-Saharan Africa is likely to breathe some fresh air into struggling vaccine campaigns across the region at a time when third waves are sweeping across key economies. Meanwhile, although unrest in South Africa has fizzled out in the past week, there are early signs that it will leave a lasting economic effect

23 July 2021

Africa Economics Update

Dovish SARB to keep rates low for some time

Policymakers in South Africa kept their benchmark rate unchanged at 3.50% today and the dovish tone of the communications supports our view that interest rates won’t rise until the middle of next year.

22 July 2021

Africa Data Response

South Africa Consumer Prices (Jun.)

South Africa’s headline inflation rate eased in June, to 4.9% y/y, and with soft underlying price pressures and clouds over the economic recovery, the Reserve Bank will stand pat at tomorrow’s MPC meeting. Indeed, we think the repo rate will remain unchanged well into next year.

21 July 2021
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