Central Bank of Nigeria Delays Monetary Policy Committee Meeting Amidst Concerns over Rising Inflation

The Central Bank of Nigeria (CBN) has once again postponed a meeting of its monetary policy committee (MPC), raising anticipation among investors and analysts regarding the strategies of the newly appointed Governor, Olayemi Cardoso, in addressing the surge in inflation.

A report from Bloomberg on Monday cited Dr. Isa Abdulmumin, the CBN’s Director of Corporate Communications, who conveyed in a text message response that the MPC meeting scheduled for Monday and Tuesday will not be held this week. This marks the second postponement since Governor Olayemi Cardoso assumed office in September.

The CBN, starting in May 2022, had increased its benchmark interest rate from 11.5% to 18.75% in July, attributing the move to the need for a rate hike due to growing headline inflation. Despite this tightening, inflation climbed to 27.33% in October, as per the latest data from the National Bureau of Statistics (NBS).

President Bola Tinubu had previously advocated for lower interest rates to stimulate investment and consumer spending for sustained economic growth.

In the face of persistently rising inflation, suggestions have been made to explore measures beyond the monetary policy rate (MPR) for inflation control. While the International Monetary Fund (IMF) has consistently urged the CBN to maintain a tight monetary policy to curb inflation, some stakeholders have opposed the continued tightening.

Investors keenly await insights from the MPC meeting for clues on the central bank’s plans to address inflation and updates on the overhaul of the nation’s foreign exchange regulations initiated by President Bola Tinubu in June.

Inflation expectations are tilted towards an increase, potentially reaching a peak of 28.02% year-on-year in December, according to a report by Cordros Capital published on Friday. The report suggests that “further rate hikes by the MPC will send a strong message that the apex bank is not relenting in its inflation fight.”

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