The Central Bank of Nigeria, CBN, has raised the monetary policy rate, which measures the benchmark interest rate, to 27.25 per cent.
This followed the meeting of the Monetary Policy Committee, MPC, meeting.
A few economic and financial experts had advised the apex bank against raising the interest rate, saying that any further raise in the MPR could hinder Nigeria’s economic recovery and slow growth in the real sector.
On Monday, Dr Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise, CPPE, had noted that the current monetary conditions were already burdensome for investors in the real economy, with interest rates exceeding 30 per cent.
“Further tightening of monetary policy poses significant downside risks to real sector recovery and growth,” Mr Yusuf said.
According to him, businesses are seeking relief from monetary and fiscal pressures amid challenges.
He identified such challenges as exchange rate depreciation, rising energy costs, high cargo clearing costs and weakened purchasing power.
Another financial expert, Prof. Olukayode Somoye, also called for a reduction in the MPR.
Mr Somoye at the Faculty of Administration and Management Sciences, Department of Banking and Finance, Olabisi Onabanjo University, Ogun State, emphasised that the current MPR is particularly detrimental to small-scale enterprises.
“The simple thing to do is to reduce the MPR -Monetary Policy Rate.
“This will likely reduce the rising inflation and increase the level of investment; especially with the current interest rate,” he added.
(Daily Nigerian)
