Economy
MPC Meeting: Experts Predict Rate Cut to 13%
Modupe Gbadeyanka
As the Monetary Policy Committee (MPC) meeting of the Central Bank of Nigeria (CBN) commences today, experts at FSDH Research are optimistic that the committee will likely support the reduction in the Monetary Policy Rate (MPR) by 50 basis points.
At its last meeting on May 20 and 21, 2019, the MPC retained the benchmark interest rate at 13.50 percent, and retained the asymmetric corridor of +200/-500 basis points around the MPR.
It also left both the Cash Reserve Ratio (CRR) at 22.5 percent; and the Liquidity Ratio (LR) at 30 percent.
Within the last few weeks, the CBN has issued two important directives to banks within geared towards stimulating lending to the real sector of the economy to boost economic activity.
In its report, FSDH Research said members of the MPC will likely vote to reduce the policy rates because an increase was not an option under the current economic situation in the country.
It said the short-term outlook of the inflation rate (which points to a declining trend, other things being equal), stability in the foreign exchange rate, and the drive of the Federal Government of Nigeria (FGN) and the CBN to stimulate growth in the economy all support a rate cut.
The investment firm said such a cut would add weight to the implementation of the CBN’s 5-year strategic plan.
“FSDH Research anticipates a 50 basis points reduction in the Monetary Policy Rate (MPR), as well as a possible adjustment to the asymmetric rates around the MPR,” the report said.
It noted that developments in the global economy also favour an interest rate cut in the short-term and expects the Federal Open Market Committee (FOMC) of the US Federal Reserve System to lower the Federal Funds Rate by 0.25 percent at its next meeting later this month.
The firm explained that this would aim to provide additional incentive for the global economy following signs of economic slowdown.
In the June 2019 edition of its Global Economic Prospects (GEP), the World Bank downgraded the global growth forecast for 2019 by 0.3% to 2.6 percent. The downward revision reflects weaker-than-expected international trade and investment during the first half of the year. The growth in sub-Saharan Africa was also significantly lower than expected. The 2019 growth forecast for Nigeria is now 2.1%, lower than the previous forecast of 2.2 percent.
According to FSDH Research, the short-term forecast indicates that the inflation rate in Nigeria may continue to trend downwards until October 2019. This is based on the assumptions that there will be no adjustments to the electricity tariff or the pump price of Premium Motor Spirit (PMS).
“Although we stress that there is a need for these prices to increase, the FGN may not be keen to an adjustment in the short-term.
“Should the increase take place, our projections show that it will shift the inflation curve by 2.5 percent. The impact of the implementation of the new National Minimum Wage on the inflation rate is minimal. Implications of the foregoing are that there may not be pressure on the MPC to raise the policy rate with a view to taming inflationary pressure.
“The CBN is already adopting moral suasion to encourage investment in agriculture to boost production and yields in an attempt to douse a spike in food prices which would place upward pressure on the inflation rate,” it said.
A major pressure point for the FGN at the moment is the high interest expenses relative to FGN revenue. Although the major cause of this problem is government’s low revenue, the low interest rate environment since January 2019 has helped the Debt Management Office (DMO) to raise cheaper debt for the government than before. Unless there is internal or external shock, CBN policies may continue to favour a low interest rate. This may also stimulate lending to non-oil sectors of the economy, provided there are complementary fiscal policies which will improve the business environment.
The negative impact of low growth in the global economy on the price and demand of crude oil may have a negative impact on the exchange rate.
“However, the current external reserve position at over $45billion may provide short-term stability for the exchange rate. In its July 2019 Short-Term Energy Outlook (STEO), the Energy Information Administration (EIA) revised downwards its forecast for Brent crude oil price to $66.51/b in 2019. The data shows that the price of crude oil fell from a peak of $77.06/b in May 2019 to $64.12/b in June.
“We also note that an increase in policy rate may not address the crude oil price. Intervention by the
Organization of the Petroleum Exporting Countries (OPEC) in the way of a production cut may also provide short-term stability for the crude oil price.
“While FSDH Research notes there are a number of structural challenges in the economy at the moment that can reduce the effectiveness of monetary policy, there are strong indications that the MPC members may vote to reduce the MPR to 13 percent.
“The market should not be surprised if the MPC also announces a reduction in the rate of the Standing Deposit Facility (SDF) of the banks with the CBN. It is possible that the MPC will maintain the Liquidity Ratio and CRR at the current level,” the report said.
By Aduragbemi Omiyale
The gross foreign reserves of Nigeria reached a 17-year high of $51.04 billion, data from the Central Bank of Nigeria (CBN) shows.
Business Post gathered from the apex bank’s website that this new feat was achieved on Thursday, June 18, 2026.
A day earlier, which was Wednesday, June 17, 2026, the amount in the country’s external reserves stood at $50.96 billion, indicating accretion of 0.16 per cent.
This latest development is expected to strengthen the value of the Nigerian Naira in the foreign exchange (FX) market.
It was observed that since the beginning of this month, the amount in the forex reserves has been building up gradually after an initial scare.
It is believed that inflows from crude oil sales have been boosting the reserves, though prices are expected to trend downward as a result of the ceasefire deals between the United States and Iran on Friday.
The price of crude oil has cooled to around $80 per barrel. It should further moderate to its level before February 28, 2026, when the bombardment of Iran started, which led to the death of the country’s 86-year-old Supreme Leader, Ayatollah Ali Khamenei.
By Aduragbemi Omiyale
A €200 million financial partnership to support the development of small-scale investments of Nigerian enterprises contributing to the country’s green and digital economy has been signed by the Development Bank of Nigeria (DBN) and the development arm of the European Investment Bank (EIB) Group, EIB Global.
The funds would be disbursed to Micro, Small, and Medium Enterprises (MSMEs) in Nigeria, with a focus on agriculture, renewable energy, digitalisation and innovation.
The collaboration aligns with EIB Global’s strategy to support sustainable, inclusive, and resilient economic growth in Nigeria under the Global Gateway Initiative.
The investment programme will boost private sector development in Nigeria and support entrepreneurs and job creation by easing access to suitable finance for MSMEs and Midcaps.
It will also strengthen Nigeria’s green transition by expanding financing opportunities for companies in the renewable energy and agribusiness sectors.
In agriculture, it will help improve productivity, develop local supply chains, and strengthen food security for a country that hosts the largest population in Africa.
On the energy side, improved financing for renewable energy businesses will support clean energy access, reduce carbon emissions, and help build climate resilience in underserved communities.
“This partnership with DBN will strengthen the competitiveness of Nigeria’s private sector, especially for SMEs in the green and digital sectors.
“In supporting green projects and women entrepreneurs, we are also fostering inclusive growth and climate action.
“This is a powerful example of EIB’s real impact on the ground,” EIB Vice-President, Mr Ambroise Fayolle, said at a signature ceremony on Thursday, June 18, 2026, at the Lagos office of the DBN.
Also commenting, the chief executive of DBN, Mr Tony Okpanachi, described the investment as a significant milestone in efforts to drive Nigeria’s economic growth and sustainability.
“The €200 million investment from EIB Global is a significant milestone in our mission to drive Nigeria’s economic growth and sustainability. By supporting local financial institutions and MSMEs in key sectors like agriculture, renewable energy, digitalisation, and innovation, we’re empowering entrepreneurs and fostering a culture of sustainable innovation,” he stated.
By Adedapo Adesanya
Nigeria has the potential to produce 1.9 million barrels of crude oil per day, having hit a peak production of 1.86 million barrels per day in May, according to the chief executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Mrs Oritsemeyiwa Eyesan.
The NUPRC chief said this on Wednesday during a meeting with the chairman of the Nigeria Revenue Service, Mr Zacch Adedeji, at the NRS headquarters in Abuja.
In a statement signed by the agency’s Head of Media and Corporate Communications, Mr Eniola Akinkuotu, it was disclosed that the country’s oil industry has continued to record production growth, noting that crude output reached a peak of 1.86 million barrels per day in May, placing the industry on a stronger recovery path.
The meeting also focused on strengthening collaboration between the two agencies to promote transparency, accountability and efficiency in the collection of oil and gas revenues.
Speaking during the engagement, Mrs Eyesan commended the leadership of the NRS for reforms that culminated in the enactment of the NRS Act and described the transition of revenue collection responsibilities as smooth.
Mrs Eyesan said the process had been seamless. The CCE also highlighted the Commission’s efforts in creating an enabling environment for operators in the oil and gas industry.
“We are here to enable them, enable their businesses, ensure that they survive and succeed. And we want to grow the pie because when you grow the pie, everybody benefits,” she said.
She also disclosed that recent gains in crude production demonstrate that industry reforms and collaborative efforts by stakeholders are beginning to yield positive results.
“We are back to production. We are ramping up now, and we want to continue working. We still recognise the constraints. Infrastructure and asset integrity are major constraints, but we will work on these. Even human capacity in the industry—we see that because we want to grow, we must also grow that capacity to meet the demands,” she said.
The NUPRC boss also pointed out that one of the key targets upon assuming office was the digitisation of NUPRC’s operations, a goal she said has largely been achieved.
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