Economy

MPC Meeting: Experts Predict Rate Cut to 13%

Published

7 years ago

22/07/2019

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.

Economy

CAC Introduces Direct Payment Option to Ease Business Registration

Published

44 minutes ago

07/05/2026

Adedapo Adesanya

By Adedapo Adesanya

Businesses operating in Nigeria can now register easily as the Corporate Affairs Commission (CAC) introduces a direct payment option on its portal.

A statement posted on the commission’s handle on X (formerly Twitter) on Wednesday noted that the move is aimed at streamlining registration services as well as optimising the portal for efficiency.

“The Corporate Affairs Commission (CAC) wishes to notify its esteemed customers that payments for the following filings can now be conveniently made directly on our portal via ReVOps on the Intelligent Company Registration Portal (iCRP),” it announced.

The Revenue Optimisation and Assurance Project (REV-OP) was launched last year to strengthen public financial management.

The initiative focuses on blocking revenue leakages and improving transparency across government agencies.

It is built on three pillars: transparency, efficiency, and digital transformation.

The new payment systems allow users to pay for services through ReVOps on its Intelligent Company Registration Portal (iCRP).

Before now, the previous payment structure relied on the Remita gateway, which supported debit cards, bank transfers, and branch payments.

According to the Commission, the initiative is part of efforts to improve service delivery and streamline its processes for users.

The CAC listed services now eligible for direct payment include Annual Returns Filing, Change of Business Address, Cessation of Business, Change of Name, and Change of Objects.

It added that other services, such as Change of Proprietor or Partner details, are Certified True.

The move aligns with the federal government’s broader push to digitise public finance and improve revenue collection through technology.

REV-OP enables real-time monitoring and data-driven decision-making, marking a shift toward a more technology-driven approach to government revenue systems.

Economy

Nigerians Pay More to Buy Eggs, Beans, Garri

Published

5 hours ago

07/05/2026

Adedapo Adesanya

By Adedapo Adesanya

Nigerians paid more to buy staple foods, including eggs, beans, and garri, in March 2026 compared with what they paid in the preceding month, according to the National Bureau of Statistics (NBS).

The agency, in its Selected Food Prices Watch report for March 2026, released on Wednesday, said that the average price of eggs (a crate of 30 pieces) on a month-on-month basis went up by 2.00 per cent from N6,007.35 in February 2026.

However, the price of the proteinous meal decreased by 20.12 per cent on a year-on-year basis from N7,670.56 recorded in March 2025 to N6,127.63 in March 2026.

Similarly, the report said that the average price of 1kg of brown beans decreased by 49.39 per cent on a year-on-year basis from N2,616.26 in March 2025 to N1,325.85 in March 2026, but on a month-on-month basis, the price increased by 1.41 per cent from the N1,307.44 recorded in February 2026. It also showed the average price of 1kg of white garri decreased by 41.19 per cent on a year-on-year basis from N1,362.96 in March 2025 to N801.4 in March 2026, and on a month-on-month basis, it rose by 1.38 per cent from the N790.62 recorded in February 2026.

The report said that the average price of 1kg of onion decreased by 19.63 per cent from N1,434.85 recorded in March 2025 to N1,153.14 in March 2026. On a month-on-month basis, 1kg of onions increased by 1,59 per cent in March from the N1,135.12 recorded in February 2026.

The report said the average price of 1kg of fresh ginger increased by 20.46 per cent from the N4,600.23 recorded in March 2025 to N5,541.25 in March 2026. On a month-on-month basis, 1kg of ginger increased by 0.61 per cent in March from the N5,507.43 recorded in February 2026.

However, it said the average price of one litre of palm oil decreased by 4.71 per cent on a year-on-year basis from N2,511.77 recorded in March 2025 to N2,393.38 in March 2026.

Economy

NASD Exchange Rises 1%

Published

7 hours ago

07/05/2026

Adedapo Adesanya

By Adedapo Adesanya

Four securities buoyed the NASD Over-the-Counter (OTC) Securities Exchange by 1.00 per cent on Wednesday, May 6.

During the session, 11 Plc soared by N19.10 to sell at N210.10 per unit compared with the previous day’s N191.00 per unit, FrieslandCampina Wamco Nigeria Plc gained N9.90 to close at N116.80 per share versus N106.90 per share, Food Concepts Plc rose by 23 Kobo to N2.59 per unit from N2.36 per unit, and IPWA Plc increased by 3 Kobo to trade at N7.3o per share compared with the preceding day’s N7.27 per share.

As a result, the market capitalisation went up by N24.32 billion to N2.454 trillion from N2.429 trillion, and the NASD Unlisted Security Index (NSI) grew by 40.64 points to 4,101.58 points from 4,060.94 points.

It was observed that at midweek, there were two price decliners led by Okitipupa Plc, which shrank by N5.00 to finish at N300.00 per unit compared with the previous day’s N305.00 per unit, and Central Securities Clearing System (CSCS) Plc dipped by N1.14 to N76.00 per share from N77.14 per share.

The volume of securities traded by investors fell by 9.5 per cent to 506,651 units from the 679,768 units recorded a day earlier, and the number of deals slid by 15.9 per cent to 37 deals from 44 deals, while the value of securities went up by 25.5 per cent to N44.8 million from the N30.9 million recorded on Tuesday.

At the close of business, Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with 3.4 billion units valued at N8.4 billion, followed by CSCS Plc with 60.3 million units exchanged for N4.1 billion, and Okitipupa Plc with 27.8 million units traded for N1.9 billion.

GNI Plc also ended the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth N8.4 billion, trailed by Resourcery Plc with 1.1 billion units sold for N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units transacted for N1.2 billion.