As Monetary Policy Committee (MPC) holds its first meeting in the year 2018, economic experts and stockbrokers have urged the Central Bank of Nigeria (CBN) to lower interest rate on lending.
The last meeting of the nation’s financial apex body was held in November last year. The meeting was delayed as a result of National Assembly’s reluctance to screen two deputy governors of the bank and some MPC members because of the on-going executive -legislature power impasse.
According to President, Chartered Institute of Stockbrokers, Mr Oluwaseyi Abe, the stock market is expecting the committee to come up with policies that will bring down interest rates benchmark.
“The Monetary Policy Committee meeting is long overdue. This is the first of such meeting in the year since November, 2017 and there are lot of hopes and aspiration that are hanging around it.”
“The delay may have accounted for what we are witnessing in the stock market. A whole lot is being expected by the international community that attaches credibility to such meeting,” he said.
Also, the Director General, Lagos Chamber of Commerce and Industry (LCCI), Mr Muda Yusuf, said the committee should keep the monetary rate low so that interest rate can come down.
“CBN should keep the monetary rate low so that interest rate can come down for us in business interest rate is still very high. Whichever model they want to use, this time around, they should keep it down, we want a reduction in interest rate. There are many factors businesses are grappling with and these are pushing up cost of production. MPR is one of the flexible tools that can be used to support the variables. If this can be reduced, it’s good for businesses growth and job creation even though it may cause some challenges for inflation,” he said.
Yusuf said though he was not expecting much from the committee being the first meeting of the year, said inflation is risen, CBN should relax the rate.
“Right now, inflation is on the high side even though, it has been decelerating. Situation with inflation is a major factor that is often considered by CBN on whether to relax the rate or not, but I don’t think inflation has come down significantly enough, though our reserves are looking good. The stability of the exchange will be preserved by the apex body. I don’t foresee any relaxation in any monetary condition given the state of those variables,” he said.