Home Business CBN will maintain status quo on policy rates— Analysts
BusinessNewsUncategorized

CBN will maintain status quo on policy rates— Analysts

Share
CBN Governor, Godwin Emefiele
Share
CBN Governor, Godwin Emefiele

 

By Chioma Obinagwam

As the last Monetary Policy Committee (MPC) meeting for the year enters it’s second day, Analysts at Afrinvest Limited, an independent investment banking firm with a focus on West Africa, have predicted that the policy rates- Monetary Policy Rate (MPR), Cash Reserve Ratio (CRR), Liquidity Ratio and Asymmetric Window, will remain the same.

They said, “We believe the MPC will maintain status quo on all policy rates – Monetary Policy Rate (MPR) at 14.0 per cent, Cash Reserve Ratio (CRR) at 22.5 per cent, Liquidity Ratio at 30.0 per cent and Asymmetric Window at +200 and -500bps around the MPR.”

UBA Leo

“We believe the MPR will be kept at 14.0 per cent to maintain the delicate balance between the downside risks to inflation, investment outflows and growth. Given that risks to inflation remain moderate and concentrated on the supply side, increasing interest rate will be ineffective to curb inflation,” they added.

The analysts said they expect the committee to deliberate on the decline in oil prices, further rate hikes in the US, the prospective increase in minimum wage to N30,000/month, higher inflation rates, continued portfolio outflows and increasing political uncertainty ahead of the 2019 general elections.

Confiance News gathered that the the increase in minimum wage to N30,000 per month is not a threat to inflation even as the analysts argued that inflation remains driven by supply side factors such as food shortages.

The analysts were quick to add that since the committee last met, inflation has accelerated to 11.3 per cent in September and expect it to be sustained for the rest of 2018.

“However, this does not paint the complete picture of inflationary trends. The recent rise in inflation rates mainly reflects a low base as Month on Month (M-o-M) inflation decelerated to 0.8 per cent in September 2018 (August: 1.1). This slowdown is mainly due to the harvest season which prompted a moderation in food prices. Also, core inflation which policymakers watch keenly has fallen to 9.8 per cent- the lowest since January 2016,” they explained.

Please follow and like us:
Share

Leave a comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Start your career with NNPC Limited

Start your career with NNPC Limited
Start your career with NNPC Limited

Member

Don't Miss

How creation of flood insurance can reduce risks

Please follow and like us:

How publisher of The Eagle Online became president of Media Cooperative Society

The publisher of The Eagle On-line, Dotun Oladipo, is the reigning president of Innovative Media Partners Cooperative Multipurpose Society...

Related Articles

How creation of flood insurance can reduce risks

Please follow and like us:

How publisher of The Eagle Online became president of Media Cooperative Society

The publisher of The Eagle On-line, Dotun Oladipo, is the reigning president...

‘How reliable are the public agencies involved?’ Netizen reacts to Union Bank’s Fire drill

Netizens raises concerns over the reliability of public agencies in real life...

Reactions as Alex Iwobi releases new single

By Chioma Obinagwam British-Nigerian professional footballer, Alex Iwobi, has released a new...

Advertisements