The Central Bank of Nigeria (CBN) has announced that the 268th meeting of the Monetary Policy Committee (MPC) will hold on Monday 22 and Tuesday 23 of July 2019. The meeting will hold at the MPC Meeting Room on the 11th Floor, Wing C, CBN Corporate Headquarters, Abuja.
At the last meeting of the MPC held in May 2019. The highest monetary policy decision making body left rates unchanged:
- The Monetary Policy Rate (MPR) was left at 13.50%;
- The asymmetric corridor was also retained at +200/-500 basis points
- Cash Reserve Ratio (CRR) was also left at 22.5%
- Liquidity Ratio was also left unchanged at 30%.
The MPR is the rate at which the CBN lend money to bank. The rate is the major determinant of the interest rates charged by banks on loans.
The Asymmetric Corridor refers to the rate of flexibility around the MPR.
CRR is the percentage of the banks deposit to be kept at CBN as reserve by banks. CRR is kept at CBN at zero interest.
Liquidity Ratio refers to the ratio of Banks liquid asset that is enough to fund outflows/ withdrawal by customers for a period mostly 30 days.
Next week’s MPC meeting will be the first since the CBN governor, Godwin Emefiele began second five-year term in the office. The Governor has since announced the policy direction of the CBN for the next 5 years, followed by other measures to ensure that the real sector get the boost with adequate fundings from banks.
Next week’s MPC meeting is expected to follow the same policy direction to align with the CBN 5 years plan of Improved access to credit for Farmers, MSMEs, Consumer credit and Mortgage.
Analysts have however argued that in the event of cut in rate from its current 13.50% in other to improve access to credit as contain in the CBN 5 years agenda. Investors in government Bonds and Treasury Bills may be dissuaded from making further investments in government securities.