January 22, 2019/FSDH Research
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) announced its decision to maintain rates at the current levels after a two-day meeting which ended today.
The key rates are:
Monetary Policy Rate (MPR) : 14.0% with asymmetric corridor around the MPR at +2%/-5%;
Cash Reserve Requirement (CRR): 22.5% and
Liquidity Ratio : 30%.
The MPC’s decision is in line with the view of FSDH Research released in our report entitled “Keeping Policy Rates at Current Levels is Still Prudent”
Implications of the MPC Decision
In order to address the ensuing risks to possible increase in inflation rate in Nigeria and the weak exchange rate, FSDH Research believes the CBN will continue to use the sales of Government securities to influence interest rates and yields.
Therefore we expect the yields on fixed income securities to increase marginally from the current levels in coming weeks.