The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) will on Monday and Tuesday (25th and 26th Nov) hold its last meeting for the year.<\/p>\n
Finance and economic experts believe the committee will look at most recent developments around inflation, Nigeria\u2019s debt profile, interest rate and Gross Domestic Products (GDP) growth.<\/p>\n
Analysts speculate that the spike in the headline inflation at a time of falling external reserves puts the MPC on the spot at the upcoming meeting, especially with the imminent wage-induced inflation.<\/p>\n
\u201cIf the numbers come in lower than expected, the committee will be confronted with a policy dilemma. Meanwhile, the MPC members of the CBN have continued to express concerns over the increasing debt and its vulnerability to the nation\u2019s economic growth,\u201d analysts at Proshare said.<\/p>\n
Some members are also expected to look back at their contributions in the last meeting and project the financial landscape for 2020.<\/p>\n
\u201cAs the threat of debt vulnerability continues, a coordinated domestic revenue expansion with simultaneous fiscal prudence as suggested in the last MPC meeting remains the key to addressing the weak fiscal position of the economy,\u201d Dr Robert Asogwa, member of the MPC said at the last meeting.<\/p>\n
The House of Representatives last week urged the Central Bank of Nigeria to review its Monetary Policy Rates by putting into consideration the cost of doing business by banks.<\/p>\n
At 13.5 per cent, Nigeria\u2019s policy rate, which is at par with Malawi, is the sixth highest in Africa. It is lower than only Zimbabwe\u2019s rate of 35 per cent, Sierra Leone\u2019s 16.5 per cent, Ghana\u2019s 16 per cent, Angola\u2019s 15.5 per cent and Sudan\u2019s 15.4 per cent.<\/p>\n
Concerned about this, the House noted that there is a need to control the interest rates of banks lending particularly to Small and Medium Enterprises (SMEs), manufacturers and Industrialists.<\/p>\n
But interest rates are determined by three forces. The first is the CBN, which sets the benchmark MPR.<\/p>\n
That affects short-term and variable interest rates. The second is investor demand for treasury notes and bonds. That affects long-term and fixed interest rates. The third force is the banking industry. They offer loans and mortgages that can change interest rates depending on business needs.<\/p>\n
Different types of interest rates are driven by different forces. Variable interest rates are just what the name says, they vary throughout the life of the loan.<\/p>\n","protected":false},"excerpt":{"rendered":"
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) will on Monday and Tuesday (25th and 26th Nov) hold its last meeting for the year. Finance and economic experts believe the committee will look at most recent developments around inflation, Nigeria\u2019s debt profile, interest rate and Gross Domestic Products (GDP) growth. Analysts […]<\/p>\n","protected":false},"author":62,"featured_media":1356,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24,15],"tags":[503,365,1170],"class_list":["post-18105","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-cbn","tag-inflation","tag-mpc"],"yoast_head":"\n