The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has deferred its 293rd meeting scheduled for Monday and Tuesday, September 25 and 26, 2023, respectively.
The apex bank made this know via a notification on Thursday, saying: “A new date will be communicated in due course. We regret any inconvenience this change may cause our stakeholders and the general public.”
The MPC meeting is a bi-monthly sitting where members of the committee vote to determine various key rates that determine direction of the economy.
The rates include the Monetary Policy Rate (MPR) otherwise known as interest or lending rate, the asymmetric corridor, Cash Reserve Ratio and Liquidity Ratio.
For instance, at the last MPC meeting, concluded on July 25, the committee jacked up the MPR by 25 basis points to 18.75% as a response to tame biting inflation.
Similarly, the asymmetric corridor was narrowed to +100/-300 basis points around the MPR from +100/-700 basis points; CRR was retained at 32.5% while the liquidity Ratio was also kept at 30%.
In anticipation of the aborted 293rd meeting, economic experts and financial market pundits in the country have shared view with the Committee on how to vote right at the end of the meeting.
One of such stakeholders, the Lagos Chamber of Commerce and Industry (LCCI) urged the apex bank to suspend interest rate hikes as a measure to alleviate supply-side pressures contributing to rising inflation.
In a statement released earlier in the week, the Director-General of LCCI, Dr. Chinyere Almona, responded to the August inflation rate of 25.80 per cent.
BUSINESS METRICS reports that inflation rose to 25.80 per cent in August 2023, 1.72 per cent points higher than the 24.08 per cent recorded in the previous month.
She emphasized the need for businesses to implement various cost-reduction strategies to lower operational expenses and maintain profitability amidst inflationary challenges.
Dr. Almona also expressed concern about the ongoing decline in households’ real income, especially in the near term.
She pointed out that the uptick in inflation, driven by increases in both food and core components of the Consumer Price Index, raises uncertainty about future price movements.
“Furthermore, we urge the Central Bank of Nigeria (CBN) to pause interest rate hikes to relieve the pressures on the supply side, especially at this time,” she said.
Charles Abuede, another analyst, from Cowry Asset Management, said the committee will not be holding the rate because of the persistent upward trend in headline inflation, both in Nigeria and globally.
“Abuede said the issue of inflation remains a top concern for central banks, noting that in the last MPC meeting in July, “they raised interest rate by 25 basis points to 18.75 per cent and adjusted the asymmetric corridor by +100/-300 basis points around the MPR from the initial+100/-700 basis points.”
“We anticipate the committee to adopt a more hawkish stance at the upcoming meeting in an effort to combat rising inflationary pressures,” Abuede said.
Projecting an increase of between five to 20 basis points, Abuede said the CBN’s tools in its arsenal are weak considering the fact that despite previous rate hikes, the inflation rate is still surging.
