CBN's MPC Meeting Delay Triggers Naira's Record Fall Towards N1000/$1

The naira on Thursday depreciated to its worst ever since the negative trend began. At the parallel market, it reads 1,050/$ due to the shifting of the CBN Monetary Policy Committee meeting.

On Wednesday, the naira traded for 980/$ and fell worse than ever because of the high demand for dollars.

The CBN yesterday postponed a rate-setting meeting, which was expected to take place from September 25 to 26. The reason was that the new governor was yet to be confirmed as the head of the biggest financial institution in Nigeria. 

Aside from that, the acting governor of the CBN and four deputy governors submitted their resignations, leaving a vacuum for policies to drive.

The Monetary Policy Committee (MPC) is regulated by the CBN, and they meet every month to make policy on the Monetary Policy Rate (MPR), popularly called the benchmark interest rate.

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Since May 2022, the CBN has settled on a hawkish monetary policy to maintain the country's inflation.

The commission, at its last meeting, raised its benchmark interest rate for the eighth consecutive time to 18.75% from 11.50% in May 2022. The CBN data showed this.

The announcement was signed by the director of corporate communications, Isa AbdulMumin, and posted on the CBN website. Also, the CBN said that it will communicate a new date for review.

Reactions on the Delay of the CBN Rate Review

Yemi Kale, partner and chief economist at KPMG Nigeria, said, 

• There is no implication. A meeting was deferred, probably till new management can come in.

Charlie Robertson, head of macro strategy at FIM Partners UK Ltd, said, 

• I suspect the new CBN governor wants more time to build consensus ahead of an interest rate decision. Any policy shift will require good communication, so it makes sense for the CBN to align research and the MPC around a common view.

Kalu Aja, a financial planning expert, said 

• A nation not at war or in crisis is not holding an MPC, much less the largest economy in Africa.

Fadekemi Abiru, head of insights at Stears, said,

• The continued unpredictability of the naira underscores the importance of timely and informed decision-making for businesses and investors in Nigeria.

Onoja Usman, managing director/CEO, of Lovonus Microfinance Bank Limited, said,

• There is a total reform going on now at CBN; there won’t be any continuity of policies as the previous governor and his deputies were removed and not retired; if retired, there would have been continuity. So we are looking forward to seeing a new policy.