As members of the Monetary Policy Committee (MPC) meet today and tomorrow at the headquarters of the Central Bank of Nigeria (CBN) in Abuja, economic experts say it is most likely that the Committee will retain Monetary Policy Rate (MPR) at 14 per cent.
At its May 2018 meeting, the MPC maintained the MPR at 14 per cent with the asymmetric corridor at +200 and -500 basis points around the MPR; retained the Cash Reserve Ratio (CRR) and Liquidity Ratio (LR) at 22.50 and 30 per cent, respectively.
In exclusive interviews with our reporter yesterday, managing director/chief executive officer of Financial Derivatives, Bismarck Rewane and Professor Uche Uwaleke of the department of banking and finance, Nasarawa State University expressed belief that MPC will retain the rates at their current positions. They hinged their confidence on the twin factors of the ongoing pre-election campaigns and potential increase in headline inflation.
“We are not expecting anything different,” Mr Rewane said, stating that “the closer you get to election, the more unlikely you will make any change in interest rate because whatever change you make will be interpreted to being politically motivated.”
He believes that Nigeria should have reviewed the interest rate downward in the last two meetings of the Committee. “Doing it now will be too little, too late. But like they say, it’s better late than never. But any move by this time may be considered politically motivated,” the economic analyst asserted.