NBS to release Q3 growth data as MPC meets today

Image result for CBN Governor, Mr. Godwin EmefieleThe Central Bank of Nigeria’s Monetary Policy Committee will on Monday (today) and Tuesday hold its final meeting for the year, to deliberate on key issues affecting the economy.

This came just as the National Bureau of Statistics is expected to release the Gross Domestic Product growth figures for the third quarter, on Monday (today)

During the once-in-two-months MPC meeting, held last in September, policymakers will seek to find solutions to challenges confronting the economy.

According to economic analysts, issues that will top the agenda are the fragile growth in the economy, rising non-performing loans and illiquidity in the banking sector, among others.

The MPC had in September retained the Monetary Policy Rate (the benchmark interest rate) at 14.0 per cent; Cash Reserve Ratio at 22.5 per cent; and Liquidity Ration at 30.0 per cent with asymmetric corridor at 200 and -500 basis.

The MPC had kept the rate in the same level since mid 2016.

Economic and financial analysts told our correspondent on Sunday that the MPC might retain the MPC, CRR and LR at the same rate, explaining that the policymakers might not be willing to tweak the monetary policy stance until next year.

The Chief Executive Officer, Economics Associates, Dr. Ayo Teriba, said, “They are approaching the last meeting of the year with some mild positive improvements in the economy. We have exited recession, inflation is coming down, and the exchange rate is stabilising. The question we may want to ask them is whether they have the intention to commence monetary policy easing. If not, do they have the plan to do that in the near future?

“I don’t think they may want to distort the fragile stability in the foreign exchange market. Maybe in their first or second meeting next year, they may want to do that.”

The Chief Executive Officer, Financial Derivatives Company Limited, Mr. Bismarck Rewane, said the general consensus was that the MPC would keep the key economic rates unchanged.

He, however, said policymakers could not afford to wait for a very long time, stressing the need for prompt actions to stimulate growth.

Rewane said, “The general opinion is that no policy action will be taken until January. The CBN is waiting for things to happen before it takes action. We should not be waiting for things to happen. I am not sure we have much time to keep waiting.”

The Chief Executive Officer, Cowry Asset Management Limited, Mr. Johnson Chukwu, said the MPC might need to reduce the CRR by 50 basis points, and the LR by 25 basis points in order to release more funds into the economy for growth.

The CBN Governor, Mr. Godwin Emefiele, had during the Bankers Night two weeks ago said the economy was recording some improvements and that the central bank might change its monetary policy stance from tightening to easing next year if the numbers kept improving.

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