Rate hike on card as monetary committee meets

The) of the Central Bank of Nigeria (CBN) is to meet on Monday and Tuesday next week to consider key macro economic indices and other monetary policy issues ahead of the general elections next year. Informed industry sources say the Monetary Polic Rate (MPR) may be reviewed upward from the present 14 percent.

The MPR is the rate at which the apex bank lends to the deposit money bank which in turn affects interest rate.

The 264th meeting of the MPC will take place in Abuja. Although the agenda of the meeting has not been made public, it is expected that recent developments in the country which have fiscal implication for the government as well as the next year’s general elections will form part of the agenda.

The MPC has the responsibility of ensuring monetary and fiscal stability in the economy by regulating the amount of money in circulation so as to prevent inflation and keep the general price level normal.

A fortnight ago, the tripartite committee on the new national minimum wage submitted the report report of its negotiation with labour and other stakeholders to the President. The committee recommended N30,000 as the new minimum wage subject to ratification by the President.

In the same vein, there are fears of monetary policy challenges next year as the electioneering campaigns flag off in the country. The Independent National Electoral Commission (INEC) has set November 18, 2018 for the commencement of campaigns for the general elections which hold in February 2019.

Political parties’expenditure on advertisements, campaign rallies, payment to field and support staff and other sundry expenses are expected to lead to exponential growth in general money supply next year.

In view of these events, financial sector analysts expect that the MPC may review upward the Monetary Policy Rate (MPR) from the present 4 percent to curtail excess money in the economy.