MPC Meet - expect no changes   
July 20 (Lagos) - Next week the Monetary Policy Committee of the CBN will meet on Monday and Tuesday to decide on the Monetary Policy Rate among other things. 

We expect them to hold the rate at 14%, leaving the asymmetric corridor of +200 basis points and -500 basis unchanged.

Retain the Cash Reserve Requirement (CRR) at 22.5%.

Retain Liquidity Ratio at 30%.

In our opinion, the committee should be looking to increase the key benchmark lending rate because that is the only way to support the ailing Naira against the stock US Dollar. On the flip side, the move will increase borrowing costs for Companies. However it will be beneficial to the Banking industry. All this is not likely because elections are approaching and the economic policies of this Government have already destroyed a lot of economic activity over the past few years. 

Let us hope they don't make any uninformed decisions like they did in November of 2015 when they cut interest rates sharply only to re-instate it back just few months later. Those few months saw an unprecedented decline in Naira against the US Dollar and the economic disaster is still visible today. 

These are the people who control the destiny of Nigeria's economy and they way they behave is very important to everybody so let us pray they don't many any more mistakes. 

Naira is still 360 to 1 Dollar in the parallel markets and one day this committee has to be made to answer why it is so and what is the use of all these meetings if they cannot bring back the Naira to at least 200 to 1 Dollar. 

reporting for on Friday, July 20 2018 from Lagos, Nigeria
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