Meristem Research analysts predict that the newly created Monetary Policy Committee would raise the Monetary Policy Rate during its meeting on Monday and Tuesday.
According to BusinessDay, the experts stated in Meristem’s macroeconomics report that the MPC would be concentrating on discussing a~ number of topics, such as evaluating the disinflation patterns seen in developed nations and keeping an eye on the actions taken by the international monetary authority.
The MPC is getting together for the first time since Olayemi Cardoso, the new governor of the CBN, took office in October of last year.
In July 2023, at its most recent meeting, the committee fixed the benchmark interest rate at 18.75 per cent.
“We expect that the Monetary Policy Committee will concentrate on a number of important issues during the next meeting. These include keeping an eye on the actions taken by the international monetary authority and assessing the disinflation patterns seen in advanced countries,” according to the paper.
The experts went on to say that the committee remained extremely concerned about the ongoing rise in headline inflation in the country, which was linked to rising food costs and the depreciation of the naira.
“Furthermore, it is anticipated that the committee’s decisions would be influenced by elements like the money supply and the ongoing free collapse of the naira.
“In light of the ongoing inflationary pressures and the expectation of a persistent upward trend, we anticipate that the Committee will increase the policy rate by 100 basis points to 19.75 percent. Additionally, we expect a rise in the Cash Reserve Ratio by 250bps to 35.00 percent, with other policy parameters remaining unchanged.
“Additionally, considering the necessity of aligning the monetary policy rate with prevailing market interest rates, we opine that a ‘hold’ stance is unlikely,” the analysts said.
Nigeria’s headline inflation rate increased to 29.9 per cent in January from 28.92 per cent in December of last year, according to the most recent figures from the National Bureau of Statistics.
In the meantime, the biggest economy in Africa expanded by 3.46 percent during the 2023 fourth quarter.
Following President Bola Tinubu’s submission of the nominations for the Monetary Policy Committee of the Central Bank of Nigeria last week, the Senate on Wednesday reviewed them.
The committee members were questioned about the ongoing food and foreign exchange issues and their plans to act quickly to address them.
The Senate approved Cardoso as the head of the MPC on Thursday. Other confirmed members of the committee were Muhammad Sani Abdullahi, Bala Bello, Emem Usoro, Philip Ikeazor, and Lamido Yuguda, the director general of the Securities and Exchange Commission.
