Post Views: 214 By Odegua Idialu The Central Bank of Nigeria has hinted of plans to increase interest rates in the country after months as it hopes to...
By Odegua Idialu
The Central Bank of Nigeria has hinted of plans to increase interest rates in the country after months as it hopes to tighten the monetary policy in response to higher inflation ahead of the general elections in February.
A Bloomberg report on Tuesday quoted a CBN Deputy Governor, Dr Joseph Nnanna, as giving the indication on Monday on the sidelines of a conference in the resort city of Sharm El-Sheikh in Egypt.
Aready, he said virtually all members of the Monetary Policy Committee had supported the idea, that “the Monetary Policy Rate should increase if inflationary pressures build up.”
But finance and economic experts have expressed divergent views on the issue with those opposed to the idea saying increasing the MPR would make it difficult for businesses to raise funds.According to the report, the MPC has held its key rate at a record 14 per cent since 2016 in a bid to prop up the naira and tame inflation after it spiked to double digits in the same year. While price growth has since slowed to below the monetary policy rate, the panel has shifted from some members voting for rate cuts in January to three of 10 members favouring higher rates at the July meeting.
Market activities was bearish as Foreign investors sold the 2027s and 2028 FGN benchmark bond. We observed a rescheduled date for bond auction for the month of
August . However, this has FBN bond auction has been scheduled to hold on the 22August 2018 15-Aug from the earlier scheduled date of 22-Aug.
The Treasurybills market was relatively quiet although most activities was seen on short Maturities.With robust liquidity in the banking system rates are likely to move south .
The OBB and Overnight rates remain relatively stable to close at 7.52% and 8.42% with no major outflow from the banking system. as there were no significant outflows from the system .
The Naira remained stable N306.00/$ at the interbank market while the l&E window closed at N362.30/$
The parallel market closed at N361.50/$.