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Monetary Policy Decision - MPC Holds Rates As Political Vote Comes Into Focus

MPC holds rates as political vote comes into focus                                                                         

At its first meeting of the year, the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) voted unanimously to HOLD all policy rates at previous levels, in line with Consensus expectation. The decision comes ahead of next month’s general elections and amid continued marginal movements in inflation figures, with the Governor highlighting the positive m/m trend in inflation. The committee also highlighted some of the external economic factors which affected the Nigerian economy in 2018, from volatility in the global financial market, to the ongoing trade war between the U.S. and China, Brexit and the hiking of monetary rates by western economies.                                                                               

Highlighting some of the major internal factors that have affected Nigeria, the CBN Governor Godwin Emefiele warned that the late passage and implementation of the 2018 budget, along with softer oil prices had negatively impacted the economy towards the end of 2018. He added that the rise in inflation from 11.3% in November to 11.4% in December were indications of economic headwinds which would continue to extend into 2019. However, the committee noted that an increase in Monetary Policy Rate (MPR) at this juncture amid these growth inhibiting factors and a general election would be ill-advised.                                                                         

At its first meeting of the year, the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) voted unanimously to HOLD all policy rates at previous levels, in line with Consensus expectation. The decision comes ahead of next month’s general elections and amid continued marginal movements in inflation figures, with the Governor highlighting the positive m/m trend in inflation. The committee also highlighted some of the external economic factors which affected the Nigerian economy in 2018, from volatility in the global financial market, to the ongoing trade war between the U.S. and China, Brexit and the hiking of monetary rates by western economies.