Countdown to September 2019 CBN MPC Meeting: Key Economic and Market Issues To Watch


Thursday, September 19, 2019 / 7.00AM /  Ottoabasi Abasiekong for Proshare WebTV / Header Image Credit:


As the Monetary Policy Committee (MPC) of the Central Bank of Nigeria meets today to review key issues around the monetary policy rate (Interest Rate), Cash Reserve Ratio (CRR), Liquidity Ratio and the Asymmetrical rate Corridor , various local stakeholders expect the Bank to hold indicative policy ratios constant as it assess the impact of the last rate cut.

Other key issues of interest prior to the September 2019 MPC meeting will be updates on international crude oil price regime and monetary policy response, UK Brexit and US-China trade conflict and the likely impact on Nigeria’s balance of trade and foreign reserves.

Key economic and financial market developments that will be taken into consideration before the end of the MPC on Friday September 19, 2019 include;


Constitution of the Economic Advisory Committee

The appointment of Dr. Doyin Salami an Associate Professor of Economics, Lagos Business School and former member of the Monetary Policy Committee of the CBN, as Chairman of an 8-man Economic Advisory Committee continue to generate discourse.

This comes at a time monetary policy authorities have in the past made a strong case for a more robust fiscal policy direction for the economy.

The EAC with aspirational economists and financial specialists like Professor Charles Soludo (Former CBN Governor), Professor Ode Ojowu (Economist) and  Mr Bismark Rewane (CEO, Financial Derivatives) marks a significant step in President Muhammadu Buhari's decision to engage seasoned local intellectuals in designing a sustainable economic roadmap for the country.


Q2, 2019 1.94% GDP growth- Slow But Steady

The Gross Domestic Product growth for Q2, 2019 according to the National Bureau of Statistics, NBS revealed that Nigeria grew at 1.94%.

This is a slow but steady growth rate that is below the 2.6% annual population growth rate of the country.

The disparity in the two rates signals the need for policy to bring about faster-paced GDP growth while perhaps also encouraging a voluntary reduction in the average national child birth rate. The GDP per capita would be an indicator of interest to monetary policy officials while deciding money supply and domestic interest rates.


11.02% August 2019 Headline Inflation Rate

The August 2019 headline inflation rate released recently by the National Bureau of Statistics, showed that it growth rate fell by 6 basis points from 11.08%  in July 2019 to the current rate of 11.02%.

Part of the 5-year agenda of the current Central Bank Governor Mr Godwin Emefiele is to attain a single-digit inflation rate.

The MPC will also look at the developments around inflation rate and the contributing factors to the current position with a view to pulling the rate to within a band of 6%-9% within the next 12 quarters.


Steady Improvement In PMI - 57.9% For August, 2019

The Purchasers Managers Index report revealed an improvement by 30 basis points from 57.6% in July to 57.9% in the month of August 2019.

The PMI report reflects activities of purchasing managers in the manufacturing sector, which typically signals a rise or fall in production activities.

Review Impact of The 60% LDR For Banks

The MPC meeting will be an opportunity for assessing the impact of CBN's earlier circular to banks to maintain a Loan-to-Deposit ratio (LDR) of 60%.

The MPC will be taking place in less than a week to the deadline of effective implementation of the 60% LDR mandate; the MPC meeting will be an opportunity to review the impact of the policy in incentivizing banks to increase lending to the real sector of the economy.


Current Interest Regime

The current interest rate regime of the CBN upholds a Policy rate of 13.5%, analysts and commercial enterprises will be watching to see if the MPC will retain, cut or increase the MPR.


Table 1 Central Banks and Global Policy Rates 2019

Central Bank

Interest Rate Regime

US Federal Reserve


Bank of England


European Central Bank


Central Bank of India


Central Bank of Canada


Bank of Japan


Central Bank of South Africa


Central Bank of Russia


Central Bank of Brazil


Central Bank of Ghana


Central Bank of Egypt


Source: Proshare Economy

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