Nigeria MPC begins second meeting in 2025

The Central Bank of Nigeria's Monetary Policy Committee (MPC) has commenced its second meeting of the year, with analysts expressing concerns about the elevated global uncertainty impacting naira stability. Kayode Akindele, CEO of Coronation Capital, shared his insights on the potential decisions the committee might take during an interview with CNBC Africa. Akindele highlighted key areas of interest, including the headline interest rate, exchange rate stability, foreign exchange reserves, inflation, economic growth projections, and the private sector's performance. The CEO pointed out that the headline interest rate was likely to remain unchanged at 27.5%, as the Governor had previously indicated a cautious approach, waiting for a clear trend in inflation before making any alterations. Regarding exchange rate stability, Akindele noted some volatility but suggested that the Central Bank of Nigeria (CBN) was working to regain market confidence by taking measured steps to address fluctuations. A major concern discussed was the impact of declining oil prices on the country's budget assumptions. With oil prices hovering around $63-$64 per barrel and production levels lower than forecasted, there was speculation that the government might need to revise its budget targets. Akindele emphasized the importance of realistic budget assumptions and potential tax reforms to boost revenues. The private sector's optimism, as indicated by the CBN's Purchasing Managers' Index (PMI) reaching 52.2 points in April, reflected the stability in macroeconomic conditions. Akindele acknowledged the sector's confidence in reforms and the need for continued macroeconomic stability amidst global uncertainties. Looking ahead, Akindele urged the CBN to prioritize maintaining stability and supporting economic growth. The outcome of the MPC meeting is eagerly anticipated, with stakeholders eager to understand the committee's stance on key issues affecting Nigeria's economy. As global uncertainties persist, Nigeria faces challenges in navigating economic headwinds. The decisions made by the MPC will play a critical role in shaping the country's economic trajectory in 2025.