Pre-MPC Communique of May 22-23 2017-Access Bank

May 22, 2017/Access Bank Plc

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The Monetary Policy Committee (MPC) of the Central Bank of Nigeria will hold its two-day meeting on Monday and Tuesday May 22 and 23, 2017.
The major highlights of the Meeting are likely going to be:
§  Retain MPR at 14%, leaving the asymmetric corridor of +200 basis points and -500 basis unchanged: Despite the easing inflation, we expect the apex bank to maintain rates in an attempt to anchor the downward inflation trend. In the March Monetary Policy Committee (MPC) statement, the CBN governor made it clear that loosening the policy rate will worsen price pressures, while tightening of rates would be detrimental to already-weak economic growth. The Committee is also likely to view the recent passage of the 2017 budget by the National Assembly as further evidence that fiscal stimulus to jump-start economic recovery is underway.
§  Retain the Cash Reserve Requirement (CRR) at 22.5%.
§  Retain Liquidity Ratio at 30%.
§  Exchange rate: We anticipate no change in the FX policy stance by the CBN as the monetary regulator evaluates the recent changes it enacted in April.