Nigeria's central bank surprises with rate hike, cites inflation
By Chijioke Ohuocha
ABUJA, May 24 (Reuters) - Nigeria's central bank on Tuesday raised the benchmark interest rate by 150 basis points to 13%, its first hike in more than two years, to combat rising inflation, sending markets tumbling.
The move surprised analysts and traders who expected the Monetary Policy Committee (MPC) to keep the rate on hold.
But Governor Godwin Emefiele told a news briefing that the rate hike was necessary to tame inflation, which quickened to 16.82% in April, its highest in eight months, amid a fragile economic recovery.
Six members of the MPC voted to increase the main lending rate by 150 basis points, four of them by 100 basis points and one by 50 basis points.
It was the biggest rate hike since July 2016 when the central bank increased rates by 200 basis points.
"(MPC members) felt that tightening will help rein in inflation before it assumes a galloping trend," Emefiele said.
"The committee decided to raise monetary policy rate for the first time in two and a half years to rein in the current rise in inflation as members were of the view that the continued uptrend may adversely impact growth."
Food and energy prices are rising in Africa's most populous country after Russia's invasion of Ukraine pushed up oil prices and disrupted supplies of commodities like corn and wheat.
The rate hike sent the yield on Nigeria's longest 30-year bond soaring 75 basis points to 13.8%. Overnight lending rates climbed 200 basis points to 14% while the main share index .NGSEINDEX fell to a two-week low.
Razia Khan, chief economist for Africa and the Middle East at Standard Chartered, said the rate increase raised questions about whether this could be a precursor to a change in the central bank's policy on foreign exchange.
"This could be the most important signal yet of eventual FX policy intentions ... but we will not really know until we see whether and how much market rates reprice," she said.
The naira recovered from a record low of 609 on the black market NGNP= to 606 naira against the dollar after the hike but it weakened to 443.50 naira on the official market NGN= from 413.80 naira and later traded at 417 naira.
The central bank governor, who ended his presidential ambition on Monday, said the economy was expected to expand 3.25% this year, lower than the federal government's projection of 4.2% growth.
Writing and additional reporting by MacDonald Dzirutwe and Estelle Shirbon; Editing by Catherine Evans, Mark Potter and Mark Porter
免責聲明: XM Group提供線上交易平台的登入和執行服務，允許個人查看和/或使用網站所提供的內容，但不進行任何更改或擴展其服務和訪問權限，並受以下條款與條例約束：（i）條款與條例；（ii）風險提示；（iii）完全免責聲明。網站內部所提供的所有資訊，僅限於一般資訊用途。請注意，我們所有的線上交易平台內容並不構成，也不被視為進入金融市場交易的邀約或邀請 。金融市場交易會對您的投資帶來重大風險。