Analysts see CBN’s Monetary Policy Committee leaving the interest rate at 14% record-high

Led by the CBN Governor, Godwin Emefiele, the meeting will take measures on foreign capital inflow, rising inflation taking consideration February 2019 elections.

Nigeria's central bank governor Godwin Emefiele speaks during the monthly Monetary Policy Committee meeting in Abuja, Nigeria January 26, 2016.
  • Members of the Central Bank of Nigeria (CBN)-led Monetary Policy Committee (MPC) converge for the first time in 2019.
  • The meeting will take measures on foreign capital inflow, rising inflation taking consideration February 2019 elections.
  • Analysts say the committee will maintain status quo on the key lending rate.

Members of the Central Bank of Nigeria (CBN)-led Monetary Policy Committee (MPC) have converged for a two-day meeting in Abuja, the nation's capital to take a decision of key lending rates.

The 265th meeting of the Monetary Policy Committee (MPC) will end on Tuesday, January 22, 2019, and it is the first monetary meeting in the year 2019.

Led by the CBN Governor, Godwin Emefiele, the meeting will take measures on foreign capital inflow, rising inflation taking consideration February 2019 elections.

Analysts see CBN MPC maintaining status quo on lending rates

Ike Chioke, Managing Director, Afrinvest West Africa Limited, expects the monetary authority to maintain to status quo on all policy rate. Chioke argued that the electioneering period will not allow the apex bank to tamper the country's rates at this time.

In the same vein, some experts also told News Agency Of Nigeria (NAN) that the monetary committee will retain the country's interest rate.

Prof. Sheriffdeen Tella, a Senior Economist at the Olabisi Onabanjo University, Ogun, said since the national elections were around the corner, politicians were expected to spend huge sums of money for campaigns which might push inflation upwards.

He noted that the CBN was doing all within its powers to reduce inflationary pressures on the economy.

Prof. Evans Osabouhien of the Department of Economics, Covenant University, Sango-Ota, said that the apex bank would maintain the rate. “I don’t see the possibility of changing the rate as CBN will likely want to keep the stability,” Osabouhien said.

The country's Monetary Policy Rate (MPR), its benchmark interest rate at 14% since 2016; Cash Reserve Ratio (CRR) at 22.5% and Liquidity Ratio (LR) at 30% as well as the retention of the Asymmetric corridor at +200 and -500 basis points around the MPR.

Nigeria's inflation rate at 11.44% as at December 2018

Last week, in its December 2018 CPI report, the National Bureau of Statistics revealed that inflation rose to 11.44%.

The increase, the bureau said, is 0.16% points higher than the rate recorded in November 2018 and is expected to trend northwards as ahead of the elections.

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