The Bank of America has said the Monetary Policy Committee of the Central Bank may need to increase interest rates by at least 700 basis points before the end of the year to curb inflation. In an interview with Bloomberg on Monday, the bank’s sub-Saharan Africa Economist, Tatonga Rusike, said the hike was necessary to tackle soaring inflation occasioned by the fuel subsidy removal and unification of foreign exchange. “Inflation may quicken to 30% by the end of the year from 22.4% in May and that will require a monetary policy response from the central bank – effectively, interest-rate hikes by at least 700 basis points. At its last Monetary Policy Committee meeting held in May 2023, the benchmark interest rate was further pushed forward by 0.5 per cent to 18.50 per cent from 18.00 per cent in March. The raise has however not slowed Nigeria’s soaring inflation which hit 22.41 per cent in May 2023 compared with 22.22 per cent in April 2023.

Source: Punch July 04, 2023 16:48 UTC