Overview

The rebasing exercise led to a decline in inflation numbers for January 2025, falling to 24.48% from 34.80% in December. This prompted the Central Bank of Nigeria’s Monetary Policy Committee to maintain a hold policy stance. Markets had anticipated a drop in inflation, and in response, the fixed-income market has experienced a bull run. If inflation continues on this path—largely due to high base effects—there is a possibility of policy easing, which could sustain the bull run as investors take positions at current yield levels.

The foreign exchange market remains relatively stable, supported by ongoing CBN interventions. However, concerns are emerging over the continuous decline in the nation's gross reserves observed over the past eight weeks.

On the global front, the rollout of tariffs by the Trump administration and retaliatory actions by affected countries are raising fears of a looming trade war. While Nigeria might not be directly involved, potential impacts on oil prices could significantly affect the 2025 budget, given that oil revenues are expected to contribute a substantial share of Non-Naira denominated revenues.

Explore the full report for deeper insights into these trends and their implications for investors.

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