The Central Bank of Nigeria (CBN) is gearing up for its inaugural Monetary Policy Committee (MPC) meeting scheduled for February 26th and 27th, as outlined in the tentative MPC meeting calendar for 2024 signed by the Director of MPD.
The 2024 calendar reveals plans for a total of six MPC meetings throughout the year, marking a significant milestone for the CBN. Notably, this follows the last MPC meeting held in July of the previous year, after the suspension of Governor Godwin Emefiele. During that meeting, the CBN increased the interest rate by 25 basis points to 18.75%, reaching a 22-year high, as part of efforts to address the prevailing inflation rate of 22.79% at the time.
Despite the interest rate hike, inflation has continued to surge, reaching a 27-year high of 28.92% in the final month of 2023. The upcoming MPC meeting under the leadership of Governor Yemi Cardoso is expected to address these economic challenges.
Under the new CBN management, a departure from the initiatives of the previous administration led by Governor Emefiele is evident. In October, the CBN lifted restrictions on a list of 43 items, previously barred from accessing forex on the official bank platform since 2015. The bank also expressed its commitment to intervene in the forex market periodically to ensure liquidity.
In a strategic shift, the apex bank has announced its decision to discontinue development finance activities and suspend further applications for various development finance programs initiated during Governor Emefiele’s tenure. Governor Yemi Cardoso emphasized this shift during the 58th Annual Dinner of the Chartered Institute of Bankers of Nigeria, stating that recent CBN initiatives had deviated from its core mandate, with a focus on a development finance program lacking clarity and expertise.
Governor Cardoso’s team aims to discontinue direct quasi-fiscal interventionist activities, opting instead for orthodox monetary policy tools to implement monetary policy effectively. The upcoming MPC meeting is poised to be a critical juncture for the CBN under new leadership, as it navigates economic challenges and strives to realign policies with the central bank’s core objectives.