Senior Research Analyst at FXTM, Lukman Otunuga has said the Central Bank of Nigeria is unlikely to change its monetary policy stance this week with interest rates expected to remain unchanged at 11.5%.
Otunuga noted that while central banks across the globe have embraced looser monetary policy and lower interest rates, the CBN may not have the breathing space.
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He said: “Inflation which has accelerated to a 34 month high of 14.9% in November is likely to push higher amid dollar shortages.
“On top of this, the country is still battling with COVID-19 with a new variant emerging a few backs back.”
He further noted that on the bright side, Oil prices are trading to levels not seen since February 2018 amid signs of tightening global supply.
Otunuga said: “For emerging market oil producers like Nigeria, this is a welcome development and could boost optimism over the growth outlook for 2021.
“While prices could push higher in the near term, surging coronavirus cases and lockdowns across the globe may fuel fears around weak oil demand.
“Oil is up almost 10% since the start of the year with the commodity’s near-term outlook likely to be influenced by the pending OPEC monthly market report on Thursday.”
