Sources involved in forex reforms at the Central Bank of Nigeria have indicated that the Monetary Policy Committee (MPC) is contemplating an increase in rates by 100 to 300 basis points in their forthcoming meeting.
The MPC is set to hold its first meeting under the tenure of Mr. Olayemi Cardoso as Governor, scheduled for Monday, February 26 and Tuesday, February 27, 2024.
The initiation of this shift in monetary policy is expected to be evident in the CBN’s bi-weekly treasury bills auction which was held on Wednesday, February 7th, 2024.
In a recent auction held in January, the CBN sold treasury bills totaling N381.2 billion across various maturities: 91, 182, and 364 days.
The interest rates for these maturities were recorded at 5 per cent for the 91-day bills, 7.15 per cent for the 182-day bills, and 11.54 per cent for the 364-day bills, respectively.
The auction on Wednesday marked a significant escalation in the volume of treasury bills, with about N1 trillion up for auction.
This includes N600 billion allocated for the 364-day bills, and N200 billion each for the 182-day and 91-day bills.
The N600 billion earmarked for the 364-day tenure represents an unprecedented figure, and the cumulative N1 trillion sale is unparalleled, with records dating back to 2001.
Nigeria’s money supply stood at over N78 trillion as of December 2023, a factor many analysts attribute to the nation’s accelerating inflation.
