Again, CBN postpones MPC meeting as economy hangs on a thread

The Central Bank of Nigeria (CBN) has postponed a meeting of its monetary policy committee (MPC) again as investors and analysts look forward to the move by the new Governor Olayemi Cardoso in tackling surging inflation.

A report by Bloomberg on Monday quoted the CBN’s Director of Corporate Communications, Dr. Isa Abdulmumin, who said that “MPC is not holding” a meeting this week in a text message response.

The meeting, scheduled to be held on Monday and Tuesday, has been postponed for a second time since Olayemi Cardoso became governor in September.

Beginning in May of 2022, the CBN raised its benchmark interest rate from 11.5% to 18.75% in July.

The central bank’s claim explained that growing headline inflation required a rate increase.

In addition, President Bola Tinubu had previously stated that lower interest rates were necessary to boost investment and consumer spending in ways that would keep the economy growing.

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Despite the ongoing tightening, inflation increased to 27.33% in October, according to the most current data from the National Bureau of Statistics (NBS).

As a result, suggestions have been made to look beyond the monetary policy rate (MPR) for controlling inflation.

However, the IMF repeatedly urged the CBN to keep its monetary policy tight to rein in inflation, which has been on the increase.

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This was as several stakeholders have kicked against the constant tightening.

Inflation has been rising at its quickest rate in almost two decades, so investors are watching the MPC meeting for clues as to what the central bank plans to do to slow it down.

They are also seeking an update on the revamp of the nation’s foreign exchange regulations launched by President Bola Tinubu in June.

Inflation expectations are skewed towards the upside, possibly reaching a 28.02% y/y peak in December, according to a report published by Cordros Capital on Friday, which suggested that ‘’further rate hikes by the MPC will send a strong message that the apex bank is not relenting in its inflation fight.’’