FRI, JANUARY 11 2019-theG&BJournal- The Central Bank of Nigeria (CBN) may at its first Monetary Policy Committee (MPC) meeting this January consider easing interest rates by mid 2019. The ‘ease’ decision could be influenced by the downside risk to the 2019 outlook.
The apex bank has held rates steady all through 2018 despite public pressure to ease. The pressure to ease posed potential headache for the CBN governor who has been an avid apostle of keeping the rate steady for this long. One insider told theG&BJournal that if considered, it will be a small ‘technical’ adjustment.
One analyst told TheG&BJournal that the apex Bank held the rates for long because it didn’t want to create the impression that the economy is already doing well when it actually was slowly recovering from recession and because it did not meet its 2018 inflation rate target of 6-9 percent.
The CBN kept MPR at 14 percent, retained the asymmetric corridor of +200/-500 basis points around the MPR, retained the CRR at 22.5 per cent, retained the Liquidity Ratio at 30 per all through 2018 and pumped nearly $23.3 billion in 17 months-leading to August 2018- into the FX market in an effort to keep rates anchored and maintain steady liquidity flow through the financial system.
Investors say they are keeping a close eye on the Monetary Policy Committee (MPC) and will also be closely watching for signs of further easing of inflationary pressures which will be a welcome development for the Nigeria economy.
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