Is Nigeria near end of monetary policy tightening season?

Nigeria's Monetary Policy Committee recently announced an increase of 25 basis points to 27.5 per cent, marking a total of 875 basis points rate hike for the year. This decision reflects the ongoing efforts to stabilize the economy and manage inflation. The recent hike comes after a series of bold decisions by the government, including the removal of petrol subsidies, which had a significant impact on inflation and foreign exchange rates. While these measures initially led to volatility in the markets, we are now witnessing a more stable currency and a slowing down of the depreciation rates for the Naira. According to Rhode Luemba, Head of Flow Sales, Global Markets at Standard Bank Group, the current interest rate level is deemed sustainable in the short term, suggesting that we may not see similar drastic fluctuations in the near future. In addition to Nigeria, other African countries like Angola are also facing economic challenges. Despite the relatively stable exchange rates, there is still an imbalance between demand and supply, putting pressure on the currency. The government has been implementing targeted interventions to ensure the availability of essential goods like food and medicine, mitigating the impact of these economic pressures on the population. These efforts highlight the complex dynamics at play in African economies, as central banks strive to strike a balance between economic growth and stability. Looking ahead, as the Ghana Monetary Policy Committee concludes its discussions, there is speculation about potential interest rate adjustments. Luemba suggests that Ghana may opt for a modest cut of 50 to 100 basis points, considering the recent global trends in interest rates. While there is uncertainty surrounding the exact decision, the consensus is that central banks across Africa are adopting a cautious approach as they navigate the complex economic landscape. As central banks across Africa wrap up their meetings for the year, the focus is shifting towards setting the stage for economic recovery and sustainable growth in the coming year. The gradual easing of monetary policies in some countries signals a cautious optimism about the future, while also acknowledging the need for prudent financial management amidst ongoing challenges. The decisions made by these central banks will have far-reaching implications for the broader economy and will play a crucial role in shaping the economic trajectory of the region.