3 Reasons CBN Cancelled Interest Rate Meeting
Nigeria’s Central Bank will not hold its first Monetary Policy Meeting for the year 2018.
The meeting which was set to start on Monday would have decided if the benchmark interest rate should be retained at 14% or reviewed downward.
Here are 3 reasons the crucial monetary policy meeting could not be held.
1. There’s Not Enough MPC Member To Form Quorum: According to the CBN, the meeting was cancelled because there were not enough members of the CBN’s Monetary Policy Committee, MPC members to form the required number to hold the meeting. As a result, the benchmark rate will be maintained at 14%.
Recall that the interest rate had been maintained at 14% since July 2016.
“Under these circumstances, and in the absence of a meeting of the MPC, the CBN shall continue to maintain key monetary policy variables as decided by the last MPC meeting,” the CBN said.
2. Newly Appointed MPC Members Have Not Been Approved By Senate: On Friday, international news agency, Reuters suggested that the interest rate meeting was unlikely to be held because several new members of the MPC have yet to be approved by lawmakers, citing two central bank sources.
This has proved to be a correct assumption. At least five of the MPC’s 12 members are due to be replaced after retiring last year.
3. Presidency/Senate Squabble, Cause of the Delayed Senate Approval: The stand-off between the Presidency and the Senate over whether Presidential nominees must first be confirmed by the Senate is what has led to this delay.
After President Muhammadu Buhari nominated Ibrahim Magu as Economic and Financial Crimes Commission, EFCC chairman which the Senate had blocked, the upper chamber of the Parliament is now refusing to approve other presidential nominees, including those for the MPC.
On Friday, a presidency official said he did not know when the stand-off would be resolved but it was being addressed by Buhari’s office.
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