Omodele Adigun
As the Monetary Policy Committee (MPC) meeting of the Central Bank of Nigeria (CBN) holds today and tomorrow, economic experts are expecting both stability and cuts in the key monetary policy rates in view of the recent constitution of the Economic Advisory team by President Muhammad Buhari.
According to a former President of the Chartered Institute of Bankers of Nigeria (CIBN), Professor Segun Ajibola, there is going to be no major shift in the Monetary Policy Rate (MPR) and other key indices from the MPC until the new economic team settles down .
His words: “We still hope that there will be stability in the policy,we still expect that the key indices and the key ratios will remain the same.Not much has shifted but maybe at the time the new economic team settles down, we may experience some downward trend in some of the key indicators, the Monetary Policy Rate (MPR) and other ratios.I don’t see any major shift”.
But for Mr.Lukman Otunuga, a Senior Research Analyst at FXTM,the apex bank is likely to cut rates in a bid to revive growth by stimulating consumption. “How deep rates are cut will depend on inflation and second quarter GDP data. With lower rates encouraging businesses to bolster investments and offering banks more incentive to borrow to corporations and households, this will be supportive of Nigeria’s growth,” he said, adding that the CBN might jump aboard the global monetary easing train now that the Fed Reserves in US has made a move. “Although inflation in Nigeria remains above the 6 per cent-9 per cent target range, the CBN is likely to cut rates in a bid to revive growth by stimulating consumption. The Federal Reserve in August cut its interest rates by 25 basis points for the first time since the global financial crisis in 2008. “