Home Business Why CBN will increase MPR
BusinessNews

Why CBN will increase MPR

Share
CBN logo
Share

By Chioma Obinagwam

Aa the Nigeria’s central monetary authority, the Central Bank of Nigeria (CBN) and other members of the Monetary Policy Committee (MPC) put heads together at it’s 279th meeting to proffer policies that is seemingly best for the economy, some economic think tanks are envisaging a slight increase in Nigeria’s benchmark interest rate– the Monetary Policy Rate (MPR).

Cordros Research is of the view that the slight decline in headline inflation rate for the month of April, 2021, in addition to the marginal improvement in 2021 first quarter (Q1) Gross Domestic Product (GDP) figures released by the National Bureau of Statistics (NBS) on Sunday would influence the voting pattern of members of the MPC to most likely vote in favour of an increase in MPR.

“Our baseline expectation is that most members will vote for a 50bps hike in MPR. However, we do not rule out the possibility of a 100bps hike, particularly if the Q1-21 GDP numbers surprise positively,” it disclosed.

Confiance News gathered from the NBS on Sunday that Q1 2021 Real GDP grew 0.51 percent compared to 0.11 percent in fourth quarter (Q4) 2020 and 1.87 percent in Q1 2020.

Afrinvest Research seem to hold a different view. According to Afrinvest, the marginal decline in headline inflation and slight improvement in the 2021 Q1 GDP figures is not sufficient for an increase in MPR.

“With the reported decline in Headline inflation rate in April 2021, we are of the view that the MPC may have gotten a soft-landing to vote for the retaining of all monetary policy parameters during next week’s meeting. Besides, we believe the MPC’s voting pattern will also be shaped by the Q1:2021 GDP numbers that is likely to be published next week Monday by the NBS. Hence, given our projection of a maximum 2.1% y/y GDP growth in Q1:2021, we submit that the MPC may likely retain all monetary variable parameters at the end of next week’s meeting,” the analysts disclosed in their weekly report.

 

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Your email address will not be published.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 not to deprive yourself of scriptural benefits

By Chioma Obinagwam Everything about our lives is scripture driven and everything about the Christian religion is scripture propelled. Those were the submissions...

In eight photos, NLNG celebrates ‘The Future’, unveils new logo

NLNG celebrates The Future. It said: "We are celebrating 35 years of incorporation as a company, 25 years of exceptional operations, and 20...

Related Articles

How not to deprive yourself of scriptural benefits

By Chioma Obinagwam Everything about our lives is scripture driven and everything...

In eight photos, NLNG celebrates ‘The Future’, unveils new logo

NLNG celebrates The Future. It said: "We are celebrating 35 years of...

How Africa’s abundant gas reserves offer immediate solutions to prevailing problems

Africa has abundant gas reserves, and these rich reserves offer immediate solutions...

Safety net: NDIC reaffirms commitment to reinforcing confidence in financial system

By Chioma Obinagwam The Nigeria Deposit Insurance Corporation (NDIC) has reiterated its...

Advertisements