Friday, August 8, 2025
25.9 C
Lagos

MPC Meeting: Policy Parameters Remain Unchanged

Cordros Capital says in line with its expectation, the Monetary Policy Committee (MPC) – faced with choice of hiking or leaving policy parameters unchanged – elected to maintain status quo by keeping all monetary policy metrics at current levels.

As with the last meeting in July, three members of the Committee voted for a rate hike, while 7 members voted in favour of a hold. Pertinently, three of the members that leaned in favour of a hold, also voted for 150bps hike in CRR, thereby signalling a firmer hawkish stance.

For us, it is important to reiterate that the (1) elevated maturity profile over the rest of the year, (2) liquidity implication of election-related spending, (3) flood-induced pressure on domestic food prices, (4) tighter domestic food supply amidst lingering security issues in food producing areas, and (5) higher FAAC disbursements, driven by rising oil proceeds, portend upside risk to inflation.

However, on the currency, the MPC’s expectation that the foreign reserve would be supported by strong oil prices (above budget benchmark) and improved domestic production towards the end of the year, suggests that the CBN is unlikely to change its policy in that space soon.

Against the backdrop of the above, and with a more conservative growth outlook, we see the MPC keeping the key rate on hold in the near term.   That said, we note that a rate hike is not completely out of sight, with (1) indeed increasing member of the Committee striking a hawkish tone, (2) a low base 2018 headline inflation likely to result in higher y/y headline inflation over H1-2019, and (3) the possible hike of PMS and electricity prices after the elections next year pressuring prices.

spot_img
spot_img

Hot this week

UBA Group Chair, Tony Elumelu, Seeks Critical Measures to Drive Africa’s Development

L-R: President, Central African Republic, Faustin-Archange Touadéra and Group...

148 Nigerians Win ₦23m in Stanbic IBTC’s Reward4Saving Season 4 Promo

Stanbic IBTC Bank has successfully enhanced the financial well-being...

NCC Hosts National Broadband Mapping System in Abuja

L-R: Project Manager, Africa-BroadBand (BB) Maps, International Telecommunication Union (ITU),...

Sterling Bank Names First Beneficiaries of ₦2B ‘Beyond Education’ Fund

Sterling Bank, Nigeria’s leading financial institution, has announced the...

Former CFI of NAICOM, Sunday Thomas, to Chair NAIPE 2025 Conference

The Nigerian Association of Insurance and Pension Editors (NAIPE)...

Topics

Linkage Assurance: N35bn Total Assets, N11bn Premium Income in 2021

Daniel Braie Managing Director/CEO Linkage Assurance Plc Linkage Assurance Plc in the...

ATCON Seeks Implementation of Local Content in Telecom Sector

The Association of Telecommunications Companies of Nigeria has...

NAICOM Chief, Sunday Thomas, Loses Wife

  Mrs. Oyinade Folashade Thomas The National Insurance Commission (NAICOM) is...

Stanbic IBTC Tops Media Exposure in Oct 2021at 35%

The P + Measurement #MediaIntelligence and Performance Audit Report...

Almond Insurance Industry Awards Unveils Nominees for Nov 1 Event

The Nominees for Voting in the Various Categories INSURANCE CEO...

NAICOM Hosts World Bank Delegation to Foster Collaboration, Growth

On February 4, 2025, the National Insurance Commission (NAICOM)...

The Alternative Bank Enters Market with Lagos, Abuja, Kano Launch

L-R: Chairman, The Alternative Bank, MUHTAR BAKARE; Executive Chairman,...

Leadway Health, NUPENG Partner to Provide Comprehensive Health Insurance for 5,000 Tanker Drivers

  L-R: President, Nigerian Association of Road Transport Owners (NARTO),...
spot_img

Related Articles

Popular Categories

spot_imgspot_img