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Nigeria’s monetary policy template to become obsolete, risky from tomorrow if…

One of the key issues being considered by prospective investors both local and foreign remains the momentary decisions of the Central Bank of Nigeria’s Monetary Policy Committee (MPC).

The decisions which chiefly include interest rate setting come once within two months across every year and pronouncements from the MPC meetings help to guide business decisions and even government activities who equally rely on the decisions to fine tune fiscal policies.

However, there are clear indications that the very first MPC meeting of 2018 ordinarily scheduled for today, Tuesday, January 22 is unlikely to hold as scheduled, because of the suspension of clearance of submitted names of new board members by the Senate.

New rates are expected to be rolled out tomorrow, after the end of the two day meeting which failed to hold after all.

Currently five of the MPC’s 12 members are due to be replaced after retiring last year but names submitted to the National Assembly had remained unattended to.

Sources at the National Assembly confided in Business Hilights Abuja Bureau Chief that “Senators may delay attention to the clearance based on the presidency’s observed objection to the calls for the removal of the EFCC boss, Mr. Ibrahim Magu.

“Remember that the same issue nearly frustrated the clearance of some INEC commissioners but the Senate decided to let go. What I cannot tell you now is that the Senate will equally let go again since the presidency had maintained thick skin on the demands and resolutions of the lawmakers.

Reuters weekend quoted one of the sources, saying “The indications that the MPC might not hold are there because of quorum”.

Besides, the prevailing CBN rules make it clear that at least six members of the MPC are needed to approve any decision including an interest rate recalibration which is key to MPC decision.

Whereas business leaders wait what will transpire between today and Tuesday, when interest rate new arrangements are expected to be made public, the CBN Governor, Mr. Godwin Emefiele, had told Bloomberg that “I don’t think rates will change. Normally, when you begin the year, what you find is that you want to hold the policy rate steady”.

Business Hilights recalls that the MPC has kept its key rate at a record high 14 per cent since July 2016, trying to balance bringing down inflation and boosting an economy that exited recession only last year.

This is as investors and several other business operators had been inching for a change in the interest rates that will favour business activities and push the economic development faster.