MPC Meeting: What to expect from Emefiele; forex, eNaira, Crypto,

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) is set to meet this week, on the 22nd and 23rd, for the last time this year (2021).

The 10-man committee headed by the CBN Governor, Godwin Emefiele last met on September 17th, 2021, publishing its 38th communique that detailed the basis for its decision.

MPC meetings provide an opportunity for the CBN to communicate its monetary policy decisions on the economy. However, more recently, it been dominated by drama, surprises and rants especially during the press conferences hosted by Godwin Emefiele.

Read: CBN rebuffs calls for  Godwin Emefiele’s resignation

For example, at the press briefing following the end of the last meeting, Godwin Emefiele went after the operators of abokiFX, an online forex portal that publishes black market rates for foreign exchange transactions. He accused them of manipulating rates even going as far as bizarrely asking them to come to Abuja if they wanted a “fight” with him.

At the previous meeting in July, Emefiele surprised journalists at the media briefing when he announced a ban of Bureau De Change Operators in the country. He accused them of becoming “wholesale dealers, illegally in foreign exchange to the tune of millions of dollars per transaction” instead of selling to retail end users.

The media is already getting used to a drama-filled MPC press briefing, thus we asked analysts at the Nairametrics weekly ClubHouse session “OnTheMoney” what they expect from the CBN this week.

Read: CBN to start printing currency for The Gambia – Emefiele

On Forex…

The analysts on the show expect the CBN to revel in the perceived success of their forex policies such as the banning of forex sales to BDCs and their decision to call out abokiFX.

• Since then, the exchange rate at the black market has strengthened from about 570/$1 to N545/$1 in recent weeks.
• The CBN has often maintained that the black market was not representative of the larger forex market preferring the much-maligned rate at the Investor & Exporter window as the reference rate.
• The CBN will likely continue to maintain that its forex policies are working highlighting improved liquidity in the system. The apex bank will also point to increasing forex reserves as a further sign that it has the financial muscle to meet “authentic” demand for forex.
• On BDCs we also expect him to keep the current ban on the sale of forex to BDCs in place just as he did in the last MPC meeting when he informed reporters that the ban will remain.
• Finally, we do not expect any major forex policy change from the CBN.

eNaira

The CBN Governor will be expected to provide further details on the progress of its eNaira digital currency initiative which the central bank successfully launched.

• Data indicates that the eNaira successfully completed N46.3 million worth of transactions in less than two weeks of its launch.
• Knowing Emefiele, the CBN’s perceived success of its digital…