The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) holds its 269th meeting today and tomorrow, September 19 and 20, 2019. Note that the MPC meeting is the second to be held since the Central Bank’s Governor, Godwin Emefiele officially began another five-year term in office.

Meanwhile, financial experts and policy analysts have indicated that the “status quo” would be maintained.Basically, experts opined the Monetary Policy Rate (MPR) at 13.50% and other parameters such as Cash Reserve Ratio (CRR), Liquidity ratio, and asymmetric corridor would be held constant.

Highlights of last MPC meeting: At the last MPC meeting, all rates were retained as the committee noted that its decision was informed by the conviction that key macroeconomic indicators were trending in the right direction. At the end of the last meeting, the following decisions were reached:

  • MPR was kept at 13.50%;
  • the asymmetric corridor of +200/-500 basis points around the MPR was retained;
  • CRR was held at 22.5%; and
  • the Liquidity Ratio was also kept at 30%.

While considering decisions to either alter rates or keep them constant, the Committee noted that there was a need to boost output growth through a sustained increase in consumer credit, mortgage loans and granting loans to Small and Medium Enterprises.

Also, MPC emphasised the fact that inflation was moderate, and this means the tightening of monetary policy should not be an option at that time. The MPC further explained that restriction of the capacity of the DMBs to create money could curtail their credit creation capabilities.

On the contrary, the MPC was of the view that loosening the rates could increase money supply, stimulate aggregate demand and strengthen domestic production.


Lastly, MPC observed that given the recent actions of the Bank’s management involving the prescription of minimum lending thresholds by the Deposit Money Banks (DMBs), it was safe to assume that this action, targeted at stimulating credit growth to the real sector would increase credit delivery to the real sector and accelerate investment and economic growth.

Why will MPC hold rates?The Chief Economist for BusinessdayNonsoObikili told Nairametrics that, “The committee will maintain the ‘Status quo’. They just did a symbolic cut a few meetings ago. They can’t cut further due to balance of payments problems and they can’t raise due to politics.”

Commenting on recent inflation decline, Nonso disclosed that the impact of border closure should start to be felt from September.