MPC - Think Twice or You Sink! FDC Aligns With TheAnalyst Opinion that the CBN is Trapped


Thursday, March 26, 2020 /06:44 AM  / By FDC / Header Image Credit: FDC Ltd


In an unexpected move, Nigeria's MPC decided to keep its benchmark interest rate unchanged at 13.5%p.a. Analysts were almost unanimous in their opinion that the committee would cut rates by 50 to 100bps as a way of complimenting the fiscal stimulus required to avert a recession or at best reduce its potential impact.


The market reading of this policy stance is that the CBN is tacitly accepting the limitations of monetary policy tools in times of macro-economic turbulence. It also is trading off some of its interest rate ammunition to reduce a continued hemorrhage of FPIs (hot money) from an external reserves position that is continuously depleting.


Related Link: The Limits of Heteredox Economics Revealed, MPC Trapped and Has to Hold


Our view of the duration of crisis is mild to moderate with a possible increase in the number of infected in March and April before containment and reduction in the month of May. We are of the opinion that there is a 45% probability of negative GDP growth in Q1 and Q2 before a mild recovery in Q3.


Below, you will see the slides of a discussion by Bismarck Rewane on Channels TV News at 10pm yesterday in which he reviewed the immediate and wider implications of the pandemic on the Nigerian economy and the markets. 

Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.


Related News - Monetary Policy

  1. CBN Issues Guidelines for the Implementation of the N50bn Targeted Credit Facility
  2. CBN Communique No. 129 of the MPC Meeting - Mar 23-24, 2020
  3. The Limits of Heteredox Economics Revealed, MPC Trapped and Has to Hold
  4. Monetary Policy Preview - Caught Between the Devil and the Deep Blue Sea
  5. Fiscal or Monetary, Both, Neither?
  6. COVID-19: CBN, Bankers' Committee To Support Pharmaceutical Coys
  7. Bankers Committee Reviews Impact of COVID-19 On Economy, Announces Support Packages
  8. Coronanomics: Figuring Out CBN's Recent Policy Intervention
  9. CBN Policy Measures In Response to COVID-19 Outbreak and Spillovers
  10. Bank of England Measures to Respond to The Economic Shock from COVID-19
  11. Bank's Lending Rates Decline Albeit Slower Than Expected
  12. The Policy Wave in the Nigerian Banking sector: A Poison or a Pill?
  13. The Rationale for the Hike in the CRR
  14. Bankers' Committee to Partner FG on Bridging Infrastructure Deficit


Proshare Nigeria Pvt. Ltd.


Related News - #Coronavirus

  1. Securities Regulators Coordinate Responses to COVID-19 through IOSCO
  2. CBN to Remain Operational While COVID-19 Lasts
  3. COVID-19: Ecobank Launches "StaySafeNigeria" Media Campaign
  4. 39% of APAC Corporates More Exposed to Coronavirus
  5. World Bank and IMF Issue Joint Statement to the G20 Concerning Debt Relief for the Poorest countries
  6. COVID-19: Dangote Rallies Private Sector Operators To Contain Pandemic In Nigeria
  7. COVID-19: Opportunities For The Nigerian Digital Economy - Dr. (Mrs) Omobola Johnson
  8. In It Together: Protecting the Health of Africa's People and their Economies
  9. The Nigeria Emergency Stimulus Bill Passes Second Reading at House of Reps - For The Records
  10. eTranzact International Plc Proposes Rights Issue of 4.67bn Shares
  11. COVID-19 and the New Work Culture: The Financial Implication for Individuals
  12. Anap Foundation COVID-19 Think Tank Presents 'Coronavirus Alert'
  13. CBN Issues Guidelines for the Implementation of the N50bn Targeted Credit Facility
  14. COVID-19: Measures Taken by UK Government to Support Business
  15. COVID-19 Pandemic and the Middle East and Central Asia: Region Facing Dual Shock
  16. COVID-19: CIBN Adjusts Programmes; Holds AGM Through Teleconferencing, Postpones April Exams
  17. FIRS Grants Tax Concessions in Response to COVID-19
  18. The Limits of Heteredox Economics Revealed, MPC Trapped and Has to Hold
  19. SEC Nigeria Issues Advisory On COVID-19
  20. Fiscal and Monetary Responses to COVID-19 Menace: Racing Against Time
  21. COVID-19: Access Bank, Ecobank Bank Leverage Online Channels
  22. Crude Oil: Unsold Cargoes Forces Price Slash
  23. COVID-19: NSE Extends Time to Submit Audited Financial Statement by Dealing Members
  24. COVID-19: Ventures Platform and Lagos State Government Partner in Fight Against
  25. Fragility of State Government Finances
  26. Philanthropic Efforts Towards COVID-19 Containment Globally
  27. Non-Essential Federal Public Servants to Stay and Work From Home to Check Spread of COVID-19
  28. COVID-19: NSE Activates 30-day Remote Work Plan; Remote Trading to Continue
  29. IsDB Supports OIC Countries With $730m To Combat COVID-19
  30. COVID-19: Presidential Task Force Issues Statement; FEC Meetings Suspended Until Further Notice
  31. Quiet Bond Market as COVID-19 Fears Creates Uncertainty Among Investors
  32. The Federal Reserves is Running Out of Options to Stave Off a Coronavirus Depression
  33. ACCESS Releases Update To Key Stakeholders on Coronavirus
  34. COVID-19: NSE Extends Time to File Audited Financial Statement for the Year Ended 31 December 2019
  35. Coronavirus: Oyo State Activates Emergency Operating Centres, Names Incident Manager
  36. COVID-19: Our Compliance with Lockdown and Measures Put in Place To Serve You
  37. COVID-19: CBN, Bankers' Committee To Support Pharmaceutical Coys
  38. Bankers Committee Reviews Impact of COVID-19 On Economy, Announces Support Packages
  39. WHO launches Health Alert service on WhatsApp
  40. Coronavirus Crisis Is Crushing Global GDP Growth
  41. Coronavirus: Firstbank Deploys Measures to Protect Employees, Customers and other Stakeholders
  42. Blunting the Impact and Hard Choices: Early Lessons from China
  43. COVID-19 Outbreak: How is Africa faring?
  44. COVID-19 Pandemic: Ecobank Encourages Customers to Adopt Digital Self-Service Solutions
  45. COVID-19 Pandemic and Latin America and the Caribbean: Time for Strong Policy Actions
  46. COVID-19: NSE Advises Companies to Put Adequate Precautionary Measures In Place Ahead of 2020 AGMs
  47. Can the Nigerian Economy Survive the Virus?
  48. What's Really Happening In Oil Markets?
  49. COVID-19: Lagos and Ogun States Ban High Density Social Gatherings
  50. Banks Bring Down Cost-to-income ratios As Industry Margins Tighten
  51. NCDC Releases Self Isolation Guidance for Nigerians
  52. COVID-19: CBN to Inject N1trn Stimulus Across Critical Sectors of the Economy
  53. Coronanomics: ICIEC Pledges $150m In Insurance Coverage For OIC Members
  54. Coronanomics: Figuring Out CBN's Recent Policy Intervention
  55. Oil Price Plunge to Pressure US Energy States and Locals
  56. Coronavirus to Weaken Sovereign Fiscal Positions; Track Record Matters
  57. FG Restricts Entry Into Nigeria from 13 Countries; Suspends Issuance of Visa on Arrival
  58. UK Foreign Office Issues Travel Advice Against Non-Essential Travel Worldwide
  59. Fed Actions, US Banks Discount Window Use Prudent Amid Turmoil
  60. CBN Policy Measures In Response to COVID-19 Outbreak and Spillovers
  61. Coronavirus Containment Actions Pose Material Risk to Global Structured Finance
  62. Federal Reserve Cut Rates to Support the Flow of Credit to Households and Businesses
  63. World Bank Group Increases COVID-19 Response to $14bn To Help Sustain Economies, Protect Jobs
  64. There Is No Systemic Risk - Feedback From Goldman Sachs' Conference Call Held Sunday
  65. Coronavirus Containment Actions Pose Material Risk to Global Structured Finance
  66. Africa CDC Policy Recommendation for AU Meetings and Travel During COVID-19 Outbreak
  67. Africa CDC Guidance on Community Social Distancing During COVID-19 Outbreak
  68. COVID-19 and the Nigerian Economy: Backed to the Wall
  69. Coronanomics: Inside Nigeria's Stock Market Response
  70. Coronavirus: IsDB President Calls For Coordinated Efforts To Tackle Pandemic
  71. Coronavirus: FG to Review Budget as Oil Price Plunges
  72. Potential Impact of the Coronavirus Epidemic: What We Know and What We Can Do
  73. World Bank Group Announces Up to $12bn Immediate Support for COVID-19 Country Response
  74. China's Official Manufacturing Index Crashed from 50.0 to a Record Low of 35.7 In February 2020
  75. FG Inter-Ministerial Meeting Reviews Strategies On Containing Coronavirus
  76. Arbitrary Increase in Prices of Protective and Hygiene Products on Account of Coronavirus Concerns
  77. Coronanomics: Understanding The Darker Side of A Virus's Economic Downside
  78. Coronavirus: Establishing The Nexus Between A Bug and Global Equity Markets
  79. WHO Director-General's Opening Remarks at the Media Briefing on COVID-19
  80. First Case Of Coronavirus Confirmed In Lagos
  81. COVID-19 Refinancing Risk Elevated for 6% of Rated China Corps
  82. Global Ports Vulnerable to Coronavirus-Related Volume Declines
  83. The First Innovative Corporate Bond Supporting Anti-Epidemic Is Given The Green Light To Issue
  84. Coronavirus May Add to Liquidity Strain for Some APAC Corporates
  85. Coronavirus Set to Dampen China's Economic Growth
  86. What Coronavirus Means for Investors
  87. Coronavirus Raises Risks for China Toll Road Operators
  88. Coronavirus Could Push Global Oil Market into Surplus
  89. Airlines Face Growing Pressure From The Coronavirus
  90. Coronavirus' Severity Will Frame Effect on Corps, Sovereigns
  91. China Government Suspend Equity Market Trading to Prevent Sell-Off


Proshare Nigeria Pvt. Ltd.
Related News