As the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) reneges on its quarterly meeting date, economists project an unchanged primary rate. This is in light of the prevailing economic reality with inflation rate at 27.33%
The meeting, which was scheduled to be held on Monday and Tuesday, has been postponed for a second time since Olayemi Cardoso became governor in September. There are also speculations that a change of MPC members is in the offing.
Speaking, the President, of the Independent Shareholders Association of Nigeria, Moses Igbrude, in an interview with Nairametrics, noted that the decision of a change of interest rate will predicate on the economic environment, the state of the economy, and the cost of borrowing. He, however, said he can assure that between now and January, the monetary authorities will try to retain the prevailing rate.
He also stated that the fiscal year is almost gone, hence, he does not see why the MPC would want to change the rate at this time as such a move may confuse investors. He said that might be done when the 2024 fiscal budget is out in the public.
A lecturer at Adeleke University, Professor Tayo Bello, towed the same thought. He said the MPC can still maintain the tempo as there is no direction to the economy yet. He said there is a need to watch the economy and be very careful with whatever decision the committee may want to take.
He said the incessant rate increases have not decreased the rate of inflation because the current bout of inflation is both cost-push and demand-pull induced. He added that the inflation is also being driven by speculative demand.
Also commenting, an economist and public affairs analyst, Dr. James Nwaobasi, stated that the CBN will need to adopt a more potent strategy to tackle inflation head-on as the current tools are not making any impact on inflation.
- “If nothing different is done to tame inflation we may not be able to woo the kind of foreign investments Nigeria so desires because at the current rate, compared with the rate of inflation would only give investors negative returns on their investments,” he said.
On his part, the chief executive of the Center for the Promotion of Private Enterprise, Dr. Muda Yusuf, noted that MPC meetings are statutory in nature and also a major source of information on monetary policy direction, stressing that the outcomes are critical for investment decisions domestically and externally.
He said the CBN must have some good reasons for the postponement. “Perhaps it’s because we have a new dispensation in the CBN where the entire top hierarchy is new. The CBN governor and his four deputies are all new.
“Nonetheless, the postponement ought to be properly communicated to investors within and outside our shores. Otherwise, uncertainty and risks in the economy would be further aggravated. Outcomes of the MPC meetings bring clarity to the direction of monetary policy and many economic players expectedly look forward to it,” he stated.
