• Login
  • Register
Nairametrics
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
Nairametrics
No Result
View All Result
Home Markets Currencies

Global inflation, FX reserve depletion could push the CBN to increase interest rates

Ubah Jeremiah Ifeanyi by Ubah Jeremiah Ifeanyi
January 12, 2022
in Currencies
Godwin Emefiele, DSS, CBN

Image Credit: The Guardian Nigeria

Share on FacebookShare on TwitterShare on Linkedin

The Central Bank of Nigeria may need to tighten monetary conditions, in form of higher rates, in line with the global trend of managing foreign currency reserve depletion.

This is according to a Sigma Pensions report titled, ‘Nigeria 2022 outlook: Consolidating on recovery but persisting large imbalances present headwinds’.

The report states that emerging pressures on the fiscal and FX fronts should naturally drive renewed urgency towards reducing large subsidies and FX rate misalignments, as the onset of the 2023 electioneering season is likely to lead to continued policy inertia.

RelatedStories

CBN, forex

Global inflation: CBN hikes limit for price verification system by 500% 

February 15, 2024
Nigeria’s merchandise trade rises by 23.28% to N12.02 trillion, records trade deficit of N1.87 trillion

IMF warns soaring shipping costs could worsen global inflation

March 29, 2022

What the report is saying

The report stated that the FX challenges would lead to the CBN implications of Ming contractionary monetary policy. The apex bank can deploy contractional monetary policy such as higher interest and sell off bonds to mop up the money in circulation in order to curtail inflation.

The report said, “Furthermore, likely stronger dollar demand will convince the CBN of the need to tighten monetary conditions as with the trend across global central banks to manage FX reserve depletion. Against this backdrop, we think the current bearish trends in the fixed income market will likely persist over 2022.

“For equity markets, we see bearish trends dominating market sentiments as the fixed income optionality becomes available to investors after a two-year hiatus and as political risk premiums on Naira risk assets heighten ahead of the 2023 general elections.”

Domestic institutional investor support in bellwether names is expected to continue to limit overall market loss, according to the business.

“Despite the emergence of new variants of the COVID-19 virus, we view higher vaccine coverage and the existence of drugs as supportive of further normalisation in global economic activity in 2022. Rising inflation expectations from a mix of supply bottlenecks and stimulus fueled demand is likely to drive a withdrawal of global monetary stimulus and incite interest rate hikes which will underpin higher US dollar interest rates,” the report said.

According to the analysis, substantial fiscal borrowing requirements in 2022, along with less liquid financial system conditions, offer ample room for heightened market expectations of higher interest rates, compared to the previous two years.

It said, “We expect the oil sector to exit recession in 2022 as Nigeria’s crude production rebounds from the 1.6mbpd low base in 2021 towards a range of 1.8-1.85mbpd and as most OPEC+ curbs are removed by May 2022.

“We expect Nigeria’s economic growth to stabilise around 3.4 per cent in 2022, reflecting improvements across telecoms, trade, manufacturing, and oil.”

According to the report, a large fiscal borrowing plan and higher political risk premiums are expected ahead of the 2023 general elections.

Tags: FX reserve depletionglobal inflation
Ubah Jeremiah Ifeanyi

Ubah Jeremiah Ifeanyi

For further inquiries about this article, contact: Email: Ifeanyi.ubah@nairametrics.com Twitter: @ubahjc Linkedln: Jeremiah Ubah

Related Posts

CBN, forex
Economy

Global inflation: CBN hikes limit for price verification system by 500% 

February 15, 2024
Nigeria’s merchandise trade rises by 23.28% to N12.02 trillion, records trade deficit of N1.87 trillion
Business

IMF warns soaring shipping costs could worsen global inflation

March 29, 2022
gold, Gold fast losing the battle to Bitcoin
Commodities

Gold breaks above $1,800 trading range amidst inflation fears

July 6, 2021
Next Post
Shonekan’s Son Others Resign From Board of Nigerian German Chemicals

Ernest Shonekan: Buhari directs flags to be flown half-mast from Wednesday to Friday

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Emple
nlng
first bank








DUNS

Recent News

  • SEPLAT tops trading value as All-Share Index hits N80 trillion; ACCESSCORP leads volume 
  • President Trump issues 50-day ultimatum to Putin, threatens 100% tariffs over Ukraine war 
  • FG to establish National Design and Development Agency to support Nigerian innovators 

Follow us on social media:

Recent News

Weekly Stock Update: Nigerian Exchange Group record growth w-o-w, up by 0.48%

SEPLAT tops trading value as All-Share Index hits N80 trillion; ACCESSCORP leads volume 

July 14, 2025
President Trump issues 50-day ultimatum to Putin, threatens 100% tariffs over Ukraine war 

President Trump issues 50-day ultimatum to Putin, threatens 100% tariffs over Ukraine war 

July 14, 2025
  • iOS App
  • Android App
  • Contact Us
  • Home
  • Markets
  • Sectors
  • Economy
  • Business News
  • Financial Literacy
  • Disclaimer
  • Ads Disclaimer
  • Copyright Infringement

© 2025 Nairametrics

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
Social Media Auto Publish Powered By : XYZScripts.com
No Result
View All Result
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
  • Login
  • Sign Up

© 2025 Nairametrics