CBN May Hold Interest Rate

The Central Bank of Nigeria (CBN) which commences its second monetary policy committee (MPC) meeting for the year on Monday, March 22, is likely to maintain interest rate and other monetary policy tools.

The committee is expected to consider the domestic and international economic and financial conditions in order to implement policies that would influence the Nigerian economy in the next few weeks.

Most analysts have noted that at the end of the two-day meeting which holds a few days to Nigeria’s presidential election, members of the MPC are most likely to vote for a ‘hold’ position.

At the end of its last meeting held in January 2015, the MPC maintained all its rates, as well as the mid-point of the foreign exchange rate at at $1/N168 with a band of +/-5 per cent.

However, following the persistent demand pressure at the FOREIGN EXCHANGE+ market in the face of the declining oil price and the external reserves, the CBN last month suspended the Retail Dutch Auction System (RDAS) window, leading to a devaluation of the naira.

Though there is scarcity of the United States dollars in the economy, the central bank has been able to hold the greenback at N197 to a dollar at the interbank market.

 

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