No official reasons have been given but analysts are open to speculate over what could be the reasons for this. 

The postponement of the MPC meeting is really a postponement of the next interest rate hike. The current key benchmark lending rate of 18.5% is almost 900 basis points below the inflation rate which itself is calculated in a way which may be suspect to many analysts. The situation should be dealt with speed but this is the opposite of that so what could be the reasons for this move. 

1) Disagreements - There could be disagreements over the members of the MPC as the new leadership of the CBN may want some members to exit the committee because they have actually failed in their mandate to control inflation by delaying raising the interest rates when they should have done years ago. They kept the rate artificially low and allowed inflation to run away and snowball into the monster that it has become now. If you look at developed countries like UK & USA, they started raising their interest rates right when inflation started increasing and as a result they have managed to bring it under their control already as evidenced by their latest inflation data. Meanwhile in Nigeria, we have reached above 30% levels for food inflation and some of us are worried about a Zimbabwe type of situation unless drastic measures are adopted right now. Maybe the new CBN leadership feels like this as well and wants to shake up the committee before it holds its next meeting to establish who the new boss is. 

2) Breathing space for business - Another reason for the postponement could be that the CBN wants to year to run out so that a lot of Companies that will report their financial year will not have to grasp with increased borrowing costs immediately. This is not likely because banks are really not going to wait for CBN to increase their rate and they will go ahead and raise their rates anyway. This was the case with the previous CBN leadership where they thought they could control the Banks' interest rates by keeping their key benchmark rate lower. This never worked and had to opposite effect of making Naira a unattractive investment option for our own citizens who started investing in Dollars. 

3) Boost stocks - This delay in increasing the interest rate could provide a boost to the stock market albeit a short term one allowing some investors to pull out before the fixed income becomes even more attractive and makes it a no-brainer for many. 

4) A HIDDEN ACE - perhaps the CBN knows something that we don't. It is possible that a large chunk of USD is about to be released to the markets which will crash the Naira rate to more reasonable levels which in turn will lead to reduction in inflation. Or perhaps there is going to be reduction in price of PMS & AGO which will definitely lead to lower inflation. Whether this is done through a subsidy or some other form of inducement is not very important at this point. This is the best scenario that our analyst can think of and if this happens then CBN will be lauded for their decision to delay the MPC meetings and hold off on the interest rate hikes. 

There are more than $25 billion inside USD Domiciliary accounts in Nigeria so CBN could very well take over those accounts and release the funds to the public and crash the Naira rate and fix all its problems in one go. This money ultimately belongs to the CBN so it could be an emergency move which no one saw coming. 

If you look at other Countries say USA, Canada, UK, India or China to name a few, it is not heard of where citizens would keep such high amounts of money in foreign currencies unless they are non-residents of the Country or need the money for export-import business. In Nigeria we have a situation where regular citizens have started opening Domiciliary accounts and keep their money in US Dollars, Euro's etc. They have no business in keeping their money is a foreign currency. 

CBN could solve all its problems by taking over these foreign currencies, converting into Naira and stop this practice that ultimately leads to devaluation of the Naira. 

5) INVITATION to FOREIGN INVESTORS  - The final reason we can think of is that CBN could be courting some major foreign investors who want to come into Nigeria but are afraid of the next devaluation of the Naira which will render their investments useless. Maybe this time the CBN wants to wait for them to come and then raise the interest rate which will boost the Naira and for a change the foreign investors will see some gains on their investment rather than the usual erosion of their investments in epic proportions. 

reporting for easykobo.com on Monday, Nov 20 2023 from Lagos, Nigeria