The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) is set to begin its two-day policy meeting today, purportedly with plans for retention of the existing monetary policy stance.
The apex bank will evaluate developments on the economic front and announce its monetary policy.
Virtually all analysts yesterday agreed that with the movement in economic indicators, the bank will leave its policy rate unchanged at 11.5 per cent for the next two months.
Most analysts were of the view that the CBN’s MPC will maintain the status quo again this week given the earlier anticipated declining inflation.
Managing Director, Financial Derivatives Company Limited, Bismarck Rewane, said the new data now increases the probability of a tightening.
He disclosed that the CBN had maintained the status quo 25 times in the last 28 meetings.
Analysts at Cordros Capital Limited and Cowry Asset Management Company Limited, in separate reports released last week, believe the current pressure on the CBN is not enough to cause an upset in the nation’s interest rate regime.
“We expect domestic inflation to increase further in the coming months due to the imminent removal of petrol subsidy and the planting season effect amongst other factors.
“This increases the chances of a tighter monetary policy stance although it is highly unlikely at this time,” the report stated.
