Again, CBN postpones MPC as inflation soars

7 months ago 114
CBN

Central Bank of Nigeria building

The Central Bank of Nigeria has again postponed the meeting of its monetary policy committee despite the surge in inflation.

A report by Bloomberg on Monday which quoted the CBN’s Director of Corporate Communications, Dr Isa Abdulmumin, said, “MPC is not holding” a meeting this week in a text message response.

The meeting, which was scheduled to be held on Monday and Tuesday, has been postponed for a second time since Olayemi Cardoso became governor in September.

This latest postponement will keep investors and analysts waiting a bit longer for Cardoso’s approach to surging inflation, which hits 27.33 per cent in October 2023.

However, AbdulMumin, in a chat with The PUNCH  indicated that the meeting may have been postponed due to the upcoming Chartered Institute of Bankers of Nigeria dinner, where the CBN governor is expected to present an economic roadmap for Nigeria.

He said, in a message, “The Monetary Policy Committee meeting is not holding this week. All roads lead to the 2023 CIBN annual dinner slated for Friday, 24th.”

The PUNCH had earlier reported that the forum christened ‘The Governors Day’ will provide Cardoso the opportunity to address the stakeholders on the economic and financial markets about development during the year as well as the economic outlook for the coming year.

Economic experts are worried about this recent postponement because the markets are awaiting a new MPC decision considering the recent positive response in consumer prices to money market reforms.

The experts stressed that MPC meetings help investors understand the state of the economy and guide the public on the policy direction of the government.

The Chief Executive Officer of the Centre for the Promotion of Private Enterprises, Muda Yusuf, stated that the policy must urgently be reconvened to give information about the economy and guide the public on the government policy direction.

He said, “I imagine that because the leadership of the bank is new, I imagine that they are trying to put their acts together at least to familiarise themselves with the issues and they don’t go out to the public saying the wrong things.

“The most challenging issue is the foreign exchange and they have been taking some steps even without meeting trying to clear the backlog, which is commendable. The MPC gives information about the economy and the direction they are going, so the fact they haven’t met means there is a lack of communication. Monetary policy communication is important to guide investors and to that extent, it is important to have those meetings. Though it won’t change our current inflation rate.”

Cordros Capital recently predicted that the CBN will further hike its Monetary Policy Rate, which is currently at 18.75 per cent, by 100 basis points.

It stated that since the last MPC meeting in July, the monetary policy space has changed rapidly, given some efforts made by the apex bank, particularly since the beginning of October.

Cordros Capital said, “Further rate hikes by the MPC will send a strong message that the apex bank is not relenting in its inflation fight, particularly as near-term inflation expectations are tilted to the upside, potentially reaching a 28.02 per cent y/y peak in December.”

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