For the first time in about three years, Nigeria’s Monetary Policy Committee (MPC) decided to pause its aggressive interest rate hikes, following a rejig of inflation data and moderation in prices after raising its key benchmark rates from 11.5 percent in May 2022 to 27.5 percent in November last year.
But this decision to hold rates steady after its 299th meeting last Thursday raises critical questions about its impact on inflation that averaged 32 percent in 2024; investments flowing in on a high interest rate environment; and overall market stability.
“In terms of implications, the pause in rate hikes is expected to result in lower yields in the fixed-income market, driven by market expectations of possible rate cuts in the upcoming MPC meeting,” analysts at Lagos-based FBNQuest Merchant bank research said in a note on Friday.