In a widely anticipated move, the US Fed voted to cut interest rates by 25bps to 2%-2.25%pa. The decision is a ‘mid-cycle adjustment’ and reminiscent of a feedback monetary policy rule –where policy responds to specific events.
Nevertheless, Nigeria stands to benefit from an interest rate cut. A decline in its interest expense, a reversal of capital flows and a rally in oil prices is positive for Nigeria’s external buffers and fiscal position.
In the slides, these and other issues were discussed on the Channels TV Business Morning programme today.
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