MPC may leave rates unchanged

As the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) meets on Monday and Tuesday experts expect the Committee not to change the key rates at the end of the meeting.
In its January meeting, it retained the Monetary Policy Rate (benchmark interest rate), Cash Reserves Ratio and Liquidity Ratio at 14 per cent, 22.5 per cent and 30 per cent, respectively.
The rates are expected to remain unchanged at the end of the two-day meeting on Tuesday.
According to Mr. Bismarck Rewane, the Chief Executive Officer, Financial Derivatives Company Limited, “My projection is that they will do nothing; they will just wait and see. If I was there, I would get the interest rate down by one per cent, bring the CRR down by two per cent and putting more money into the foreign exchange market. That will be a major catalyst for economic activities.
“However, I think the prudent and safe thing that we should expect is that there will be no change for now. Bringing down interest rate has a risk element.”
He is of the view that “Nobody should take credit for what is happening”, regarding recent economic improvement, adding that the recent increase in the nation’s oil production and price rally had helped to improve the state of the economy.
It would be recalled that the nation’s foreign exchange reserves, which was at a low of $23.89 billion on October 19, 2016, stood at $30.3 billion last week based on the CBN data.
The nation’s inflation, which had climbed to 18.72 per cent in January, fell for the first time in 15 months to 17.78 per cent in February. The improvements he attributed to the relative peace in the Niger/Delta region.