Nairametrics| With the Monetary Policy Committee meeting taking place Monday and Tuesday, there are strong indications that the committee will continue its trend of retaining key economic indicators with the main interest rate expected to stay at 14%. There are 2 reasons for this prediction.
- CBN chiefs are already saying so: The members of the MPC, particularly from the CBN, are already confirming that they will support a retention of the present rates. Deputy Governor of the Central Bank of Nigeria (CBN) and a member of the MPC, Joseph Nnanna, for example, in an interview with Bloomberg, indicated that the rates are likely to remain the same with liquidity issues still remaining a concern. “We are battling with liquidity as it were, so tight monetary policy will be for now,” he said.
- Analysts are saying the same thing: With the exception of one economist, all 21 economists interviewed by Bloomberg all predicted that the MPC is most likely to keep its tight monetary control, with the main rate at a record high of 14 percent, a level it’s been at since July. The only exception, Razia Khan, head of Africa macro research at Standard Chartered Plc, forecasts a cut of 100 basis points to 13%.
With these indicators, it seems the outcome of the meeting is already a foregone conclusion. With the Naira strengthening recently against the dollar and signs of life breathing into the economy, sitting tight, doing nothing and hoping for more of the same seems to be the best way to go.