Overview

March saw sell-offs across Nigeria's financial markets as investors in the equity market sought to book profits while reduced system liquidity resulted in a bearish behaviour in both the FGN bond and T-bill markets. The exchange rate of the Naira in the I&E window remained little changed as the Central Bank of Nigeria continued to manage the currency within a narrow range.

Inflation remained elevated with data for February showing that prices had risen by 21.91% year-on-year, a headline inflation rate 9 basis points higher than the previous month. Food inflation rose by 3 basis points to 24.35% year-on-year while core inflation fell by 32 basis points to 18.84% year-on-year. The increase in headline and food inflation is attributable to the intermittent petroleum (or PMS) scarcity, the lingering impact of high commodity prices, and foreign exchange pressures.

The Monetary Policy Committee (MPC) of the CBN continued with its hawkish stance by hiking the MPR by 50 bps to 18.0% at its March meeting citing the need to curtail inflation.

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