Expert sees CBN retaining lending rate as MPC commences meeting

As the Monetary Policy Committee (MPC) of the Central Bank of Nigeria commences its 2-day meeting today, Monday 20, an economist has stated that the MPC may maintain status quo on its monetary policy rates.

In a chat an Economic Expert, Prof. Uche Uwaleke, noted that the CBN’s lending rate is expected to remain at 14 per cent while Cash Reserve Ratio (CRR) at 22.50 per cent and liquidity ratio at 30 per cent. He noted that the drop in inflation rate for the first time in 15 months might further delay changes in CBN’s rates next week.

The National Bureau of statistics (NBS) last week disclosed that the nation’s inflation rate dropped to 17.78 per cent in February, 0.94 per cent below 18.72 per cent in January this year on the backdrop of slower rise in food and non-food prices.

He noted that CBN’s effective policies in the foreign exchange market have impacted positively on foreign reserves, stressing that the committee might not introduce new policy. In his words, “the decline in Inflation rate is happening for the first time in 15 months from 18.72 per cent to 17.78 per cent in February.

“The MPC members might want to wait further. I don’t think they might want to introduce new rates because of drop in inflation rate. If the headline inflation rate continuous to move downward, of course it might force to Committee to review the rates in the next meeting” he said, adding that the CBN’s foreign exchange interventions has increased liquidity given the further appreciation of the Naira.