CBN defers 293rd MPC meeting again amid expectations

In spite of expectations by stakeholders, the Central Bank of Nigeria (CBN) have shelved its bi-monthly Monetary Policy Committee (MPC) meeting for the second time.

The meeting, expected to hold on Nov. 20 and Nov. 21, would have been the first to be presided over by Mr Yemi Cardoso as CBN governor.

This second postponement had kept stakeholders in suspense as to what Cardoso’s approach to bridging the exchange rates and addressing rising inflation would be.

It was reported that the MPC meeting, which is the 293rd in the series was earlier scheduled for September but postponed indefinitely.

At the 292nd meeting on July 24 and July 25, presided over by erstwhile acting CBN governor, Folashodun Shonubi, the committee decided to raise the Monetary Policy Rate (MPR) from 18.5 per cent to 18.75 per cent.

It also adjusted the asymmetric corridor to +100/-300 basis points around the MPR; retained the Cash Reserve Ratio (CRR) at 32.5 per cent; and retained the Liquidity Ratio at 30 per cent

According to Uche Uwaleke, a Professor of Capital Market at the Nasarawa State University, Keffi, the postponement of the MPC for the second consecutive time could be a blessing in disguise.

Uwaleke, also the President of the Capital Market Academics of Nigeria,   said that if the MPC had held in September, it was most likely the MPR would have been jerked up thereby, further increasing the cost of doing business and reducing access to credit.

“This would have been the outcome of the meeting against the backdrop of the pressure by the IMF for an MPR hike to reduce money supply.

“It would not have had any significant impact on the rising inflation,” he said.

A past president of the Chattered Institute of Bankers of Nigeria (CIBN), Mr Okechukwu Unegbu, said that MPC meeting was an ongoing process.

“Maybe the committee has not exhausted the outcome of the last meeting in July.

“Cardoso is a technocrat; he knows what to do. I believe he is settling down and trying to understand where he is. He needs to study the environment properly before getting down to business.

“I think that is what Cardoso is doing. We should give him some time, but the politicians should allow him to do his job without interference,” Unegbu said.

The Chief Executive Officer of the Centre for the Promotion of Private Enterprises, Muda Yusuf, said that the meeting must urgently be reconvened to give information about the economy and guide the public on the government policy direction.

According to Yusuf, because the leadership of the bank is new, I imagine that they are trying to put their acts together at least to familiarise themselves with the issues.

“The most challenging issue is the foreign exchange and they have been taking some steps even without meeting, trying to clear the backlog, which is commendable.

“The MPC gives information about the economy and the direction they are going, so the fact they have not met means there is a lack of communication.

“Monetary policy communication is important to guide investors and to that extent, it is important to have those meetings,” he said.