The International Monetary Fund (IMF) has said the recent increase in Nigeria’s interest rate by the Central Bank of Nigeria (CBN) is a step in the right direction, stressing that President Bola Tinubu inherited a difficult economic situation from his predecessor.
The Monetary Policy Committee (MPC) of the CBN increased the policy rate by 400 basis points to 22.75 percent for a total tightening of 1,025 basis points since May 2022. IMF gave its verdict in its end-of-mission press release by the IMF staff team that recently visited Nigeria for consultations and assessment. However, the organization stated that the views expressed in the statement were preliminary findings of the mission, explaining that a report that would emerge from the visit would still be subject to management approval after a presentation to IMF’s executive board for discussion and decision. In a similar vein, Fitch Ratings yesterday said the recent 400 basis points increase, to 22.75 percent, in Nigeria’s Monetary Policy Rate (MPR) marked progress in the country’s effort to contain inflation. Fitch Ratings, yesterday, supported the monetary policy tightening by the CBN. In a report, the rating agency said it would also support a more market-determined exchange rate, even though real rates remained negative, and the exchange rate was still subject to downward pressure for now.
