Lagos - The Central Bank of Nigeria (CBN) is later Tuesday expected to clarify its position on its exchange rate policy.
The 244th meeting of the bank’s Monetary Policy Committee (MPC) is scheduled for its Corporate Headquarters in Abuja.
“We do not expect the CBN to amend its policy rate at today’s MPC sitting, but await a clear narrative with regard to its exchange rate policy,” said Rand Merchant Bank ahead of the event.
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The economic think-tank said further monetary tightening is warranted in the second half of the year considering the upside risks to inflation and sustained widening of the output gap.
“The policy rate might be used to signal the CBN’s intention, though a more formidable stance would entail changes to the current workings of the foreign exchange market,” the financial company added.
The CBN committee’s meeting comes on the back of the local Naira currency’s freefall against the United States Dollar.
Analysts believe the oil price drop has made it difficult for the CBN to defend the currency, hence the devaluation.
- CAJ News