As inflation rate trends towards the single digit target of the Central Bank of Nigeria (CBN), analysts believe it will not be enough to instigate a rate cut by the Monetary Policy Committee (MPC) as happenings in the global community may spike a reversal of portfolio investments.
MPC members at the last meeting held in May had cited inflationary pressures triggered by budget implementation as some of the reasons benchmark interest rate was not cut.
However with the Federal Reserve Bank of the United States hike in interest rate, experts said foreign portfolio investors may begin to trickle out of the Nigerian economy.
The US Fed had last week hiked its key interest rate, for the second time this year, by 25 basis points to a range of 1.75 to two per cent penciling two more rate hikes before the end of the year in line with market expectations.
Nigeria’s inflation rate has been on a steady decline dropping to a 26 month low of 11.61 per cent in May from 12.48 per cent in April,…
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