Nigeria’s central bank postpones the MPC meeting again as the economy hangs on a thread

Nigeria’s central bank postpones the MPC meeting again as the economy hangs on a thread

 The Central Bank of Nigeria (CBN) has once again postponed a meeting of its monetary policy committee (MPC), raising anticipation among investors and analysts regarding the approach of the new Governor, Olayemi Cardoso, in addressing the escalating inflation.

According to a report by Bloomberg on Monday, CBN's Director of Corporate Communications, Dr. Isa Abdulmumin, stated in a text message response that the MPC is not holding a meeting this week.

This meeting, initially scheduled for Monday and Tuesday, has been deferred for the second time since Olayemi Cardoso assumed the position of governor in September.

Beginning in May 2022, the CBN raised its benchmark interest rate from 11.5% to 18.75% in July, citing the need for a rate increase due to growing headline inflation. President Bola Tinubu had previously advocated for lower interest rates to stimulate investment and consumer spending for sustained economic growth.

Despite the tightening measures, inflation continued to rise, reaching 27.33% in October, according to the latest data from the National Bureau of Statistics (NBS). There have been suggestions to explore measures beyond the monetary policy rate (MPR) to control inflation.

While the International Monetary Fund (IMF) has consistently advised the CBN to maintain a tight monetary policy to curb rising inflation, various stakeholders have opposed the ongoing tightening measures.

Inflation has been increasing at its fastest pace in nearly two decades, prompting investors to closely monitor the MPC meeting for indications of the central bank's strategy to mitigate inflation. Additionally, they are seeking updates on the overhaul of the nation's foreign exchange regulations initiated by President Bola Tinubu in June.

Inflation expectations are tilted towards the upside, potentially reaching a peak of 28.02% year-on-year in December, according to a report published by Cordros Capital on Friday. The report suggested that "further rate hikes by the MPC will send a strong message that the apex bank is not relenting in its inflation fight."