Financial analysts have said global events such as the rendition among global central banks and the indirect impact of the Russia/Ukraine crisis on domestic inflationary pressures may influence the Monetary Policy Committee’s decision this month.

Analysts at Cordros Capital stated, “We envisage the reactive function of the committee will be significantly challenged at this meeting, given the hawkish chorus among global central banks, and unabating domestic inflationary pressures amidst the lingering Russia-Ukraine conflict.

“We suspect the committee would retain the MPR at 11.5 per cent alongside other monetary policy parameters, given the CBN’s preference for its unorthodox policies.

“Besides, we think considerations about the implications of a rate hike on the domestic interest rate environment may prompt the majority of committee members to push back a rate hike until the next policy meeting in July.

At the last MPC meeting in March, the committee “Retain the MPR at 11.5 per cent; the asymmetric corridor at +100/–700 basis points; the CRR at 27.5 percent; and ratio at 30.0 per cent.”

The CBN Governor, Godwin Emefiele, had said, “My inclination today is to carefully balance the objective of price stability with output growth. Again, the dilemma of the trade-off between inflation and output remains extant, and I believe that a rate hike could upend our modest recovery.

“I am of the view that the current levels of policy parameters are appropriate to tackle emerging shocks, as the CBN strengthens its intervention programmes. I prefer to maintain the prevailing stance in order to foster price stability and output stabilisation without introducing disruptive policy shocks.”


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