Rédaction Africa Links 24 with Agency Report
Published on 2024-02-25 11:04:32
The Central Bank of Nigeria (CBN) is gearing up for its first Monetary Policy Committee (MPC) meeting with Yemi Cardoso as Governor on Monday and Tuesday. Economic experts anticipate that the benchmark interest rate, known as the Monetary Policy Rate (MPR), will likely be tightened to combat inflation and stabilize the Naira’s value.
The last MPC meeting was held in July 2023 and was chaired by the then-acting CBN governor, Folashodun Shonubi. During that meeting, the committee raised the MPR by 25 basis points to 18.75 per cent from 18.50 per cent. Economist Ken Ife predicts that the rates are expected to tighten further in the upcoming meeting under Yemi Cardoso’s leadership.
The CBN’s focus on inflation targeting has been emphasized, with calls for more fiscal support to address broader economic issues. Okechukwu Unegbu, a past president of the Chattered Institute of Bankers of Nigeria, believes that the MPC will likely continue to tighten rates, but the short-term impact on the economy might not be significant.
Unegbu also suggests that the government should reconsider its policies regarding the Naira, including pricing oil independently and operating outside the influence of organizations like OPEC. Bismarck Rewane, an economist and Managing Director of Financial Derivatives, agrees that tightening monetary policy is necessary to address loose monetary conditions and stabilize the currency over time.
The confirmation of Yemi Cardoso as CBN Governor and the appointment of 11 other members to the MPC by President Bola Tinubu were approved by the Nigerian Senate. These members, including deputy governors of CBN and other prominent figures, will play a crucial role in shaping the country’s monetary policies.
Overall, the outlook for the upcoming MPC meeting suggests a move towards tightening monetary policy to address inflation and stabilize the Naira. With a focus on fiscal support and independent economic strategies, the CBN aims to navigate the challenges facing the Nigerian economy. As the new leadership takes charge, the decisions made in the upcoming MPC meeting will have a significant impact on the country’s economic landscape.
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