THE Central Bank of Nigeria has scrapped the bi-monthly monetary policy committee (MPC) meeting expected to be held in November, Bloomberg reported on Monday, November 20.

According to the report, the apex bank instead chose to have its governor, Olayemi Cardoso, speak at the bankers’ annual dinner on Friday, November 24.

The ICIR reports that this will be the second consecutive time CBN has postponed the MPC meeting, raising concern about Cardoso and his committee of governors’ zeal to rescue the falling naira and bolster other economic indicators.

CBN uses the meeting to address major economic issues, considering the global and domestic headwinds.

The MPC is the CBN’s highest policy-making committee and is mandated to review economic and financial conditions in the economy.

It determines appropriate policy stances in the short to medium term, regularly checks the CBN monetary policy framework, and adopts changes when necessary.

It also communicates monetary and financial policy decisions effectively to the public and ensures the credibility of the monetary policy transmission mechanism model.

The MPC meeting was postponed by CBN in September, putting on hold its bi-monthly statutory function used to consider, recommend, and take critical economic decisions.

Efforts made by The ICIR to have the apex bank speak to why the MPC is being postponed for the second term failed. Its Director of Corporate Communications, Isa AbdulMumin, did not pick up calls or respond to text and WhatsApp messages sent to him.

Experts weigh consequence

Speaking to The ICIR on the implication of CBN’s postponement of the MPC meeting, an economist, Muda Yusuf, pointed out a couple of issues.

He said, “The current team in the CBN is new; the CBN governor is new; all the deputy governors are new. So, I imagine that they are still trying to understand the situation well and familiarise themselves with the issues before they begin to go out there to address the press. There may still be several issues they are trying to sort out.”

“That is not to say that they (CBN) should not communicate because one of the reasons that we have the MPC is after their meeting, they communicate the obvious direction of policy, which also helps to guide investors. It also has a signalling effect on the market, especially the financial market,” Muda Yusuf, said.

Yusuf, the director/chief executive officer of the Centre for the Promotion of Private Enterprise (CPPE), stressed that there was a communication value in holding the MPC meeting besides the steps the committee would take in addressing interest rate, cash reserve ratio (CRR) and the rest of the monetary policy tools.

He noted that it would also influence the economy’s direction, adding that these are important reasons the MPC should hold.

“Although, at this time, many of us do not feel that the CBN has any business in increasing interest rates even though inflation is high because the CBN has been hiking the rate for almost ten participation (meeting) of MPC, and yet inflation has not come down,” the CPPE boss stated.

Inflation rose for the 10th consecutive month to 27.33 per cent in October – the highest rate recorded since August 2005, The ICIR reported, spiking increases in foodstuff and all other economic goods.

The Nigerian currency (naira) has depreciated against the United States dollar by over 40 per cent since the exchange rate unification policy. As of Friday, November 17, the naira stood at N791.75/$1 at the official market and N1,135/$1 at the black market.

Also, an Economics lecturer at the University of Lagos, Babatope Ogunniyi, said holding the MPC was just one of the many ways CBN manages the economy, noting that there were other measures the monetary authority put in place.

He said the MPC was critical to making key economic decisions that might meet projections or below projections and that postponing the MPC meeting could help establish the effect of having to fix the MPC meeting by month.

“Presently, to say that we are not having challenges, we are only trying to play pranks on our economy,” Ogunniyi said.

The situation with the naira is disheartening based on the amount of money injected into the economy. By now, the naira is stabilising around or below N700 to a dollar.

He said the operations of speculators and the countries’ depleting external reserves were responsible for the economy’s woes.

“Our foreign reserves are already depleted. This is supposed to be a cushion upon which the naira is to maintain a balance, but it is not there. Also, ever since the present government came to power, they have been borrowing.

“Borrowing does not help any nation, especially when we are not in a time of war. The monetary and fiscal authorities need to aid the country’s economic progress,” he argued.

He pointing out that the apex bank had been reactionary rather than proactive to speculators’ activities.

Critical decisions taken at the last MPC meeting in July

At its July MPC meeting, the CBN raised the benchmark (monetary policy rate) by 25 basis points to 18.75 per cent and adjusted the asymmetric corridor around the MPR to +100-300.

It retained the CRR, which determines how banks price their loans to customers, at 32.5 per cent at the two-day MPC meeting chaired by Folashodun Shonubi, who acted then as CBN governor following the suspension of the former CBN Governor, Godwin Emefiele.

President Bola Tinubu, on September 16, appointed Cardoso as the new CBN governor.

The new committee of governors calling the shots at the apex bank is Cardoso, CBN governor, and Sani Dattijo, Emem Usoro, Philip Ikeazor, and Bala Bello as deputy governors, respectively.