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CBN to hold first MPC meeting under Yemi Cardoso



By Sodiq Adelakun

The Central Bank of Nigeria (CBN) is set to hold its first Monetary Policy Committee (MPC) meeting under the leadership of Yemi Cardoso as Governor on Monday and Tuesday.

Economic experts are predicting that the benchmark interest rate, known as the Monetary Policy Rate (MPR), will likely be increased in order to combat inflation and stabilise the value of the Naira.

The previous MPC meeting was held in July 2023 and was chaired by the then acting CBN governor, Folashodun Shonubi. During that meeting, the committee raised the MPR by 25 basis points to 18.75 per cent from 18.50 per cent. Professor Ken Ife, an Economist, believes that interest rates are likely to continue tightening for the foreseeable future.

He suggests that the MPR may either remain unchanged or be raised further in the upcoming meeting.

According to Prof. Ken Ife, an Economist, “We are likely to see rates tightening for some time. Either the MPR is kept steady, or it goes up a little more.

“The CBN says it is going for inflation targeting, but there should be more support from the fiscal authorities because a lot of the issues with the economy are not really monetary.

“We have N500 billion going for social intervention annually, the money does not go into the productive sector,” he said.

A past president of the Chartered Institute of Bankers of Nigeria (CIBN), Mr Okechukwu Unegbu, also said that the rates are likely to go up.

Unegbu, however, said that the MPC decisions are not likely to impact the economy in the short-term.

“I expect that the MPC will further tighten the rates, but that might not have any serious impact on the economy.

“President Bola Tinubu has already taken some sensitive policy decisions, even before appointing the CBN governor and the finance minister.

“Floating the Naira was a major error that has caused the nation so much pain,” he said.

He urged the government to try operating outside the purview of the Organisation of Petroleum Exporting Countries (OPEC), and pricing the country’s major revenue earner, crude oil, in Naira.

“Nigeria should do something about pricing its oil in Naira. We should leave OPEC, price our oil independently,” he said.

Unegbu also advised that the government should learn to ignore most economic prescriptions by the World Bank and the International Monetary Fund (IMF) as such prescriptions had never helped the country to grow.

An Economist and Managing Director of Financial Derivatives, Bismarck Rewane, a business management consultancy firm, also suggested that the MPR would be tightened.

According to Rewane, loose monetary conditions are totally different from tight monetary policy.

“We have no choice. They must tighten and tighten well. I suggest nothing less than 200 basis points.

“You fight loose monetary conditions by tightening monetary policy.

“There will be an effect because interest rate will increase, people will save more and consume less, and the currency will stabilise over time. There is no quick-fix,” he said.

Meanwhile, the Nigerian Senate on Thursday confirmed Cardoso as Chairman and 11 other members of the MPC forwarded to it by President Bola Tinubu.

Also confirmed as members of the MPC were Muhammad Abdullahi,  Bala Bello, Emem Usoro and Philip Ikeazor, all deputy governors of CBN.

Others were Lamido Yuguda, (DG Securities and Exchange Commission), Jafiya Lydia Shehu, (Permanent Secretary, Ministry of Finance), Murtala Sagagi (CBN director), Aloysius Ordu, Aku Odukemelu, Mustapha Akinwunmi, and Bamidele Amoo.

Money market

Naira will continue to appreciate against dollar – Shettima



Vice President Kashim Shettima has expressed optimism that the Naira would continue to appreciate against the dollar at the forex market.

Spokesperson of the Vice-President, Mr Stanley Nkwocha, in a statement on Saturday, said Shettima stated this at a meeting with officials of the Lagos Chamber of Commerce and Industry (LCCI), at the President Villa, Abuja.

He said President Bola Tinubu ended the fuel subsidy and ensured the unification of the multiple exchange rate because the former arrangement was producing billionaires overnight.

“Naira went haywire and some people were celebrating but inwardly we were laughing at them because we knew that we have the leadership to reverse the trend.

“Asiwaju knows the game, and truly the Naira is gaining and the difference will drop further.”

He recalled that the quality of leadership provided by President Tinubu as governor of Lagos laid the foundation for the massive development witnessed in the state.

Shettima assured that the Tinubu administration is doing its best to address challenges in the power sector.

According to him, Tinubu’s administration is aware that power is absolutely essential for development.

“We are determined to ensure that we generate jobs for our youths. Honestly, the President’s obsession is to live in a place of glory, to transform this country to a higher pedestal.

“He wants to leave a legacy, one of qualitative leadership because the hope of the black man, the hope of Africa rests with Nigeria.

“I want to assure you that President Bola Ahmed Tinubu is one of you. He understands your ecosystem. In this government, you have an ally and a friend.”

Earlier, the President of LCCI, Gabriel Idahosa, emphasised the need for the Federal Government to consider more innovations to address the insecurity challenge in the country.

He also urged the Tinubu administration to ensure a significant upswing in the pace and scale of alternative policy measures that promote credit access, stimulate investment, and support entrepreneurship.

“This could include targeted interventions such as concessional lending facilities, loan guarantees, and interest rate subsidies tailored to the needs of SMEs and key sectors of the economy like agriculture, manufacturing and power technology.”

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Money market

LCCI advocates discipline, export to sustain Naira appreciation



LCCI advocates discipline, export to sustain Naira appreciationThe Lagos Chamber of Commerce and Industry (LCCI) has emphasised the importance of maintaining discipline in the foreign exchange market to sustain the steady appreciation of the Naira.

The President and Chairman of the Council of LCCI, Mr Gabriel Idahosa, made the call in an interview with newsmen on Wednesday in Lagos.

Idahosa praised the efforts of the Central Bank of Nigeria in imposing discipline, attributing the recent Naira appreciation to curbing speculative activities.

“On the monetary side, the CBN is doing it. The primary efforts should continue to impose discipline in the foreign currency market.

“The abuses in the foreign currency market were prevalent and most of the fall in the value of the Naira in the last six months is not because there was any sudden calamity in the Nigerian economy.

“It was primarily because of very reckless speculations, that people were just speculating in the dollar, they had nothing to export, nothing to import, they were just buying the dollar for speculative reasons.

“And once the Central Bank started to impose discipline in the foreign currency market, we saw the value of the Naira rising very quickly by stopping speculation,” he said.

According to him, the strategies of the Central Bank, now, are designed to achieve a sustained discipline in the foreign currency market.

Idahosa highlighted the need to continue reducing the number of Bureau de Change operators, stressing that many operated without contributing to international trade.

He applauded the Central Bank’s move to enforce documentation and identification of buyers and sellers at BDCs, aiming to deter reckless speculation and curb illicit financial flows.

On the fiscal side, Idahosa urged President Bola Tinubu to prioritise a nationwide export drive, citing it as the key to bolstering the Naira and providing essential foreign exchange.

He emphasised the importance of fostering a culture of export among Nigerians across all scales of enterprise to reduce reliance on imports and strengthen the country’s economic resilience.

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Money market

Foreign reserves decline to $32.29bn



The foreign reserve has depleted to $32.29 billion, which is a six-year low in the Central Bank’s course to save the naira.

This is the lowest level the reserves have been since September 25, 2017, when it was $32.28 billion.

The country’s foreign reserves declined by 6.2 percent, losing $2.6 billion since March 18, when the naira started its rebound from record-low levels against the dollar to $32.29 billion as of Monday, based on the latest available data from the CBN.

At the beginning of the month, the reserve was at $33.57 billion, then further dipped to $32.6 billion by April 12.

This comes as the CBN has attempted to save the naira through various interventions such as raising interest rates to 24.75 percent and managing foreign exchange trades.

It stepped up its intervention in the FX market with sales at both the official market and to BDC operators who sell dollars on the streets.

The apex bank, which sells $10,000 to each BDC every week, mandated them to only sell at a spread of 1.5 percent, which comes to N1,117 per US dollar.

The rate sold by the BDCs has set a defacto floor for the naira in the black market since the apex bank resumed sales to them in February.

Also, last month the CBN said it had cleared a backlog of $7 billion since the beginning of the year. That was built over the years as the central bank pegged its currency against the dollar, leading to a scarcity of foreign currency that deterred foreign portfolio investment. However, it’s unclear how much dollar debt the CBN retains on its books.

Akpan Ekpo, a professor of economics and public policy, said the CBN’s managed float system in which it is trying to ensure supply and curtail demand is not sustainable in the long term.

He said the CBN needs to be careful with how it depletes the foreign reserves as its main source is oil revenue.

“We need to manufacture non-oil goods and services, export them, and get foreign exchange and not depend on oil income,” he said.

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