Market News

The Nigerian monetary policy committee may continue to increase interest rates in response to higher inflationary trends and weakening currency, the World Bank has said.

The Washington-based bank in its recent Africa’s Pulse report said that while other African countries have begun their easing cycles and lowering benchmark interest rates, Nigeria’s may remain elevated as cost pressures are yet to wane.

“Central banks in countries that still have double-digit inflation and weakened domestic currencies (such as Angola, Nigeria, and Sierra Leone) will keep monetary policy rates higher for longer and, in fewer cases, they may increase their policy rates—particularly in countries where inflation rates still have not peaked,” the World Bank said.

The multilateral lender explained that currency weakness, slow fiscal adjustment, and cost pressures are among the factors driving these countries to keep a tighter stance for a longer period.

Nigeria has continued to grapple with high inflation and weakened currency following the removal of costly petrol subsidy and devaluation of its naira in 2023. This twin action has eroded purchasing power and worsened citizens’ living conditions.