Experts have expressed divergent opinions as the 287th meeting of the Central Bank’s Monetary Policy Committee (MPC) begins today as Nigerians await the decision of the Committee members on the monetary policy rates.
The MPC is the body responsible for setting the Monetary Policy Rate (MPR) in Nigeria, the rate that serves as the base for all interest rates in the financial markets.
The MPC is poignant and has already hiked interest rates twice in a row in 2022, placing the lending rate at 14% at the last meeting held on July 19, 2022.
Despite these rate hikes, which have preceded a Dovish continuum that lasted for over 42 months, the inflation rate continues to rise, hitting 20.52% as of August. This is as the black-market exchange rate of the naira has maintained a steady decline, pitching at N712/$1 as of Friday, September 23.
Professor Kehinde A. Adetiloye, a fellow of the Chartered Institute of Bankers of Nigeria (CIBN), believes the central bank would hold interest rates constant. He said, “It is unlikely that the CBN will raise the MPR,”
“However, if the central bank decides to raise interest rates, it will not be by more than 50 basis points,” he remarked
Professor Evans Osabuohien, the Head of the Department of Economics & Development Studies at Covenant University, stated that the apex bank is likely going to hold rates constant. He said, “I do not anticipate any tinkering with the current MPC as the economy is trying to ‘balance up’ given inflation, especially food prices.”