According to a report from Bloomberg, the central banks of Nigeria, South Africa, and Egypt are among six likely to tighten monetary policy in the coming days.
Six additional countries are expected to pause as they determine the effects of previous hikes and relief measures to contain prices.
According to the research, the issue that will take center stage will be how weaker local currencies would affect the price of imported goods as the dollar is supported by the Federal Reserve’s aggressive rate hikes and anticipation of further increases.
Along with increasing pricing pressures from extreme weather occurrences, the effects of Russia’s conflict in Ukraine and a projected slump in Europe and China are also expected to be in the limelight.
The report said in more detail:
“Nigeria’s central bank is expected to step up monetary tightening after inflation hit a fresh 17-year high in August”
Floods in its agricultural areas, an increase in the price of diesel, and ongoing currency depreciation all raise the possibility that it will continue to be high.
At the MPC meeting in July, Governor Godwin Emefiele stated that future hikes may be considered if inflation remains “aggressive.” If the benchmark were raised, it would reach 14% for the first time since the rate’s adoption in 2006.
In order to draw in foreign exchange inflows, the central bank may feel there is still some potential to boost rates, according to Joachim MacEbong, lead analyst at Lagos-based Acorn and Sage Consulting. “Inflation remains a serious concern.”
