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Nigeria Monetary Policy November 2022

Nigeria: Central Bank slows pace of tightening in November

At its 21–22 November meeting, the Monetary Policy Committee of the Central Bank of Nigeria delivered a 100 basis point increase that brought the monetary policy rate to 16.50%. The decision, which came on the heels of Septembers 150 basis point hike, was not unanimous regarding the size of the hike; two of the 11 members preferred a 50 basis point increase. The Bank kept the asymmetric corridor, the cash reserve ratio and the liquidity ratio unchanged.

The decision was driven by the continued acceleration of headline inflation to 21.1% in October. That said, the Bank noted the deceleration of month-on-month consumer price increases, hinting that the effects of prior rate hikes are starting to be felt. This motivated the smaller-size increase. With regards to activity, the Committee noted that the economy continued to expand on an annual basis in Q3, and is expected to maintain this momentum in the final quarter of the year, providing ample room for the hike.

While the press release was void of explicit forward guidance, the Bank hinted at more rate hikes; it expects inflation to remain high.

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