By Adedapo Adesanya
The 275th Monetary Policy Committee (MPC) meeting of the Central Bank of Nigeria (CBN) is scheduled to hold on Monday, September 21 and Tuesday, September 22, 2020, at CBN Headquarters, Abuja.
The meeting is where the decision on the Monetary Policy Rate (MPR), Cash Reserve Ratio (CRR) and Liquidity ratio for banks across the country will be made.
The MPR is the rate at which the CBN lends to banks. This, in turn, determines the interest rate that banks charge members of the public.
On its part, the CRR is the percentage of total deposits required to be kept in the form of cash reserve with the central bank, while liquidity ratio indicates whether a company’s current assets will be sufficient to meet the company’s obligations when they become due.
At the last MPC meeting held in August 2020, all key rates were left unchanged. Basically, the MPR was kept at 12.5 per cent, while other parameters such as Cash Reserve Ratio (CRR) at 27.5 per cent, Liquidity ratio at 30 per cent, and asymmetric corridor remained unchanged.
The CBN Governor, Mr Godwin Emefiele, had explained that eight members of the committee voted in favour of holding the MPR, while two members wanted it reduced.
The MPC is led by the governor of the bank who is the chairman, the four deputy governors of the Bank, two members of the board of directors of the Bank, three members appointed by the president, and two members appointed by the governor.
Ahead of the meeting, analysts believe that the apex bank will retain the benchmarks so as to allow recent interventions injected into the economy to effectively achieve their purposes.
Modupe Gbadeyanka