04, 2018 /08:49 AM / FBNQuest
latest meeting of the monetary policy committee (MPC) closes this afternoon in
Abuja. It is the first since November due to the lack of quorum until the
Senate obliged by confirming enough presidential appointments to make good the
shortfall. We will have to wait to assess the thinking of the new members.
said, in our view the discussion will (and should) be based upon the direction
of inflation. The committee will doubtless welcome the decline in the headline
rate, particularly the pick-up in momentum in the past three inflation reports
from the NBS.
The CBN and the MPC used to share the
outlines of in-house inflation forecasts. This practice has ceased although the
governor is on record as anticipating gains in the fight against inflation, and
monetary easing to match.
Our own forecasts have the headline rate
down at around 11.0% y/y in mid-year, and closing 2018 about 12.0%. Positive
base effects run through to July this year. Encouragingly, both core and food
price inflation slowed y/y in the February data, and we expect a repeat in the
There is a debate about the inflationary
impact of the fx reforms of early 2017. Some importers lost access to “cheap”
dollars at the preferential rate. A greater number surely had depended upon the
parallel market and would have benefited from the fx available at the
importers’ and exporters’ window.
There has not been a cut in the policy rate
since November 2015. We can see the argument for 25bps this week. This would be
a very guarded signal however, given that the rate stands at 14.00%. Our hunch
is a reduction of 50bps. The monetary authorities are in confident mood since
the success of their exchange-rate policies has exceeded the market’s (and, we
suspect, their own) expectations.
Research Forecasts a Growth in the Banking Sector Credit to Private Sector
Commentary: Will The New MPC Stick To Or Twist?
Policy Easing Required to Stimulate Growth - MPC Considerations and Policy
- The 260th
MPC Meeting to Hold April 3rd and 4th, 2018
Reserve Issues Statement and Release Economic Projections From Mar 20-21
Mandates Committee To Report Back In A Week on CBN and MPC Members
Monetary Policy As Headwinds Shift To Tailwinds
Dollar, Higher US Interest Rates, a Dilemma for a Central Bank With No
Direct Investment and the Central Bank of Nigeria’s Monetary Policy
Statement by the MPC Members at the 116 MPC Meeting of Nov 20-21, 2017
- MPC: No
Change With or Without a Meeting