MPC Moves Meeting To February, Buys Time For Inflation Rebasing

The Monetary Policy Committee meeting, which is held bi-monthly has been postponed to February 17 and 18, three months after the last meeting in November, as authorities buy time for the rebased inflation figures.

The new date, which is reflected in the MPC meeting calendar for 2025, marks a breakaway from the traditional bi-monthly meetings.

The market had been led to expect a meeting this month after the CBN governor, Olayemi Cardoso, said at the last meeting in November that the Committee would reconvene on the 27th and 28th of January 2025.

The postponement to February buys the MPC time for the new inflation methodology to kick off in January.

Consumer prices rose at a faster annual pace in December to 34.80 percent, the last inflation figure calculated using the old methodology.

In the new methodology, the proposed base year for inflation computation is 2024. The year was proposed to capture the structural changes driven by the removal of subsidies on FX and PMS.

Also, the constituents of the inflation basket are expected to expand from 740 to 960.

The updated 2024 classification system will replace the current 1999 version. This change will increase the number of divisions from 12 to 13.

This was made known at the sensitisation workshop on Gross Domestic Product (GDP) and Consumer Price Index (CPI) rebasing organised by the Nigerian Economic Summit Group and the NBS last week.

Economic analysts argue that the GDP rebasing will yield an exaggerated GDP growth number, and the CPI rebasing will downplay the inflation rate.

“The CPI rebasing framework is disingenuous. A price reference base year put at 2024 and a weight reference period put at 2023, two peak periods of the country’s first ever shock therapy reforms will ensure that aggregate price pressures are not adequately accounted for,” Basil Abia, cofounder Veriv Africa, a data insight company said.

Head of price statistics at the NBS, Ayo Andrew, revealed that it will release the December consumer price index and another index that puts rebasing into the context this month.

“We would have the December CPI released this month and then the rebased CPI by the end of January,” Andrew said during the panel session.

This will be released ahead of the MPC meeting in February.