The manner in which the Central Bank of Nigeria (CBN) communicated the postponement of the November Monetary Policy Committee meeting has been described by Uche Uwaleke, a Professor of Finance and Capital Market Studies, and Muda Yusuf, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise as badly managed.
The experts who spoke to THE WHISTLER said the postponement of the MPC may be for good but they also argued that the way the shift was communicated may send a wrong signal to investors.
The CBN confirmed that it postponed its MPC meeting again which makes it the second time the apex bank will act in such a manner since Yemi Cardoso became the Governor.
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The CBN’s calendar had scheduled the 294th MPC meeting for November 20 and November 21, 2023.
The meeting was much anticipated following the foreign exchange crisis and the surging inflation which was at 27.3 per cent in October 2023.
Yusuf said, “MPC meetings are statutory in nature and also a major source of information on monetary policy direction. The outcomes are critical for investment decisions domestically and externally.
“The CBN must have some good reasons for the postponement. Perhaps it is because we have a new dispensation in the CBN where the entire top hierarchy is new. The CBN governor and his four deputies are all new.
“Nonetheless, the postponement ought to be properly communicated to investors within and outside our shores.
“Otherwise, uncertainty and risks in the economy would be further aggravated. Outcomes of MPC meetings bring clarity to the direction of monetary policy and many economic players expectedly look forward to it.”
In his argument, Professor Uwaleke, described the postponement of the MPC as a ‘blessing in disguise.’
He said, “The postponement of the MPC for the second consecutive time could be a blessing in disguise in the sense that if the MPC had held in September, it was most likely the MPR would have been jerked up thereby further increasing the cost of doing business and reducing access to credit.
“This would have been the outcome of the meeting against the backdrop of the pressure by the IMF for an MPR hike to reduce money supply which would not have had any significant impact on the rising inflation.”
The last MPC meeting (292nd meeting) was held on July 24 and 25 and presided over by former acting CBN governor Folashodun Shonubi.
At the meeting, the CBN raised the Monetary Policy Rate (MPR) from 18.5 per cent to 18.75 per cent.
The committee adjusted the asymmetric corridor to +100—300 basis points around the MPR, retained the Cash Reserve Ratio (CRR) at 32.5 per cent, while it also retained the liquidity ratio at 30 per cent.