Global Macroeconomic Review
United States: The U.S. economy exhibited signs of cooling inflation in February 2025, with the Consumer Price Index (CPI) rising 0.2% m/m (2.80% y/y) and core CPI slowing to 3.1% annually—the lowest since April 2021. While these figures eased stagflation fears, uncertainty lingered due to aggressive tariff policies. The Producer Price Index (PPI) remained flat, and core PPI unexpectedly declined, yet components tied to the Federal Reserve’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) index, stayed elevated. The Fed held rates steady at 4.25%–4.5% in March, revising its 2025 GDP growth forecast downward to 1.7% and raising inflation projections to nearly 3%…
United Kingdom: The UK economy faced a setback in January 2025, contracting by 0.1% amid a sharp downturn in industrial production, which fell by 0.9%—its steepest decline since mid-2023. This followed a stronger-than-expected 0.4% expansion in December, driven by holiday-driven retail and services activity. However, rolling quarterly growth improved to 0.2% (up from 0.1% in Q4 2024), reflecting underlying resilience in sectors like technology, healthcare, and professional services. The Bank of England (BoE) maintained its benchmark rate at 4.5% in March, with an 8–1 vote by the Monetary Policy Committee. Governor Andrew Bailey emphasized that while inflation risks were “rebalancing,” persistent wage growth (6.1% year-over-year) and sticky services inflation (5.7%) justified holding rates steady…
Domestic Macroeconomic Review
Inflation Eases; Improved Trade Balance; Tax Reforms; Debt Management and Private Sector
Expansion.
Nigeria’s headline inflation fell to 23.18% in February 2025, marking a second consecutive monthly decline after the National Bureau of Statistics rebased the Consumer Price Index. This reflects a 1.30-percentage-point drop from January’s 24.48% and an 8.52% decrease year-on-year, signaling possible economic stabilization after 2024’s inflationary spikes…
Market Update
Foreign Exchange Market: The Naira experienced significant depreciation in March 2025 due to persistent demand pressure in the Foreign Exchange Market (NFEM). Despite the Central Bank of Nigeria (CBN) intervening with substantial dollar sales totaling $668.8 million, the Naira weakened by 2.97% m/m, closing at ₦1,536.82/$ from ₦1,492.49/$ at the start of the month…
Money Market: Throughout March, interbank liquidity remained constrained, reflecting persistent funding pressures. Despite periodic inflows from FAAC, FGN bond maturities, and coupon payments, liquidity stayed negative for much of the month. Early in the month, the Overnight Policy Rate (OPR) and Overnight Rate (O/N) surged due to tight liquidity, peaking midweek at 32.50% and 32.90%, respectively, driven by CRR debits and NTB auction settlements…
