Postponement of MPC blessing in disguise – Expert

The postponement of the MPC for the second consecutive time could be a blessing in disguise, Professor Uche Uwaleke, has said.

The Central Bank of Nigeria had on Monday announced the indefinite postponement of the Monetary Policy Committee meeting.

The meeting, early scheduled for Monday and Tuesday, November 20 and 21, has again been postponed for the second time since Dr. Olayemi Cardoso became the governor of the apex court in September.

The CBN’s Director of Corporate Communications, Dr Isa Abdulmumin, who gave this hint in a text message, confirmed that “MPC is not holding”.

However, in a chat with National Anchor, Uwaleke, who is a Professor of the Capital Market at the Nasarawa State University Keffi, noted that had the MPC had held in September, it most likely would have jerked up the MPR thereby further increasing the cost of doing business and reducing access to credit.

“This would have been the outcome of the meeting against the backdrop of the pressure by the IMF for an MPR hike to reduce money supply which would not have had any significant impact on the rising inflation,” he said. Meanwhile, economists have projected an unchanged primary rate as the Central Bank of Nigeria postponed its Monetary Policy Committee meeting earlier scheduled for Monday, 20th of November and 21st of November 20223.

This is in light of the prevailing economic reality with inflation rate at 27.33 per cent. There are also speculations that a change of MPC members is in the offing.

Speaking, the President of the Independent Shareholders Association of Nigeria, Moses Igbrude, noted that the decision of a change of interest rate will predicate on the economic environment, the state of the economy, and the cost of borrowing.

He, however, said he can assure that between now and January, the monetary authorities will try to retain the prevailing rate.

He also stated that the fiscal year is almost gone, hence, he does not see why the MPC would want to change the rate at this time as such a move may confuse investors. He said that might be done when the 2024 fiscal budget is out in the public.

A lecturer at Adeleke University, Professor Tayo Bello, towed the same thought. He said the MPC can still maintain the tempo as there is no direction to the economy yet. He said there is a need to watch the economy and be very careful with whatever decision the committee may want to take.

He said the incessant rate increases have not decreased the rate of inflation because the current bout of inflation is both cost-push and demand-pull induced. He added that the inflation is also being driven by speculative demand.