CBN to maintain status quo on rates as inflation quickens – Independent Observers

CBN to maintain status quo on rates as inflation quickens

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By Kunle Adedoyin

Central Bank of Nigeria (CBN) is set to maintain current interest rates as the latest inflation figures accelerated for the fourth straight month in December last year, hitting its highest level since April 2018 at 11.98% .

The increase, which is largely fuelled by food prices increases amid the on-going border closure, has moved further away from the CBN 9% upper target band putting more pressure on the Naira.

Analysts said the rising inflationary pressures could force the CBN to maintain status quo on interest rates next week. However, all eyes will be on the loan to deposit ratio for banks which has been set to 65%.

With monetary easing out of the question, the Central Bank could increase the loan to deposit rate to 70% in an effort to boost economic growth through investments in Nigeria’s real sector, particularly small and medium-sized enterprises.

The first meeting of the monetary policy committee of the Central Bank of Nigeria, which was slated to hold on Monday and Tuesday, January 20 and 21, has been rescheduled for Thursday and Friday, January 23 and 24.

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