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AskProshare: Proshare Discusses 256th CBN MPCDECISION

Proshare

Monday, May 22, 2017 6.00pm/Proshare WebTV

Following the release of personal statements from the meeting in March on Friday by the CBN, the monetary policy committee (MPC) opens its latest meeting in Abuja today, and is due to announce its decisions tomorrow afternoon.

The national accounts for Q1 2017 will be accessible by the committee and are due for release tomorrow. It is uncertain if the data will show an end to recession, however marginal, though it is worthy of note that we see token growth of 0.2% y/y.


The committee has on numerous occasions displayed a reluctance to cut the policy rate on the basis that
the beneficiaries of the additional liquidity were not productive sectors such as agriculture but traders with significant forex needs. While this holds some truth, it is also a reflection on bank supervision and regulation.

Furthermore, the exchange rate policy is expected to generate plenty of commentary. The naira has appreciated on the parallel market and manufacturers are enjoying improved access to imported raw materials, an indicator that the CBN’s increase in its FX interventions has yielded some positive results. The tentative effect is that retail sentiment has been lifted and there have been stirrings from a few offshore portfolio investors. This begs the question; how far can the CBN expand its interventions without the depletion of reserves that it is determined to avoid?


In view of the aforementioned, the research and analysis team at Proshare Nigeria Limited will have a parley from 1:40pm to critically discuss and analyse the ramifications of the possible
decisions the monetary policy committee (MPC) is billed to announce tomorrow afternoon, from 2:00pm.

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