✕ CLOSE Online Special City News Entrepreneurship Environment Factcheck Everything Woman Home Front Islamic Forum Life Xtra Property Travel & Leisure Viewpoint Vox Pop Women In Business Art and Ideas Bookshelf Labour Law Letters
Click Here To Listen To Trust Radio Live
SPONSOR AD

MPR: NECA, financial experts task CBN on policies to curtail inflation

The Nigeria Employers Consultative Association (NECA) and financial experts have urged the Central Bank of Nigeria (CBN) to implement structural policies that will curtail rising…

The Nigeria Employers Consultative Association (NECA) and financial experts have urged the Central Bank of Nigeria (CBN) to implement structural policies that will curtail rising inflation.

They gave the advice on the backdrop of the Monetary Policy Rate (MPR) hike by the Monetary Policy Committee of the CBN.

Daily Trust reports that the MPC, on Tuesday, increased the MPR to 18.75 per cent from 18.5 per cent, representing the highest interest rate in 22 years.

According to the MPC, the decision to further hike interest rates was driven by the rate of rising inflation in the country. Nigeria’s headline inflation surged to 22.79 per cent in June 2023, which is the highest rate since September 2005. This is despite multiple interest rate hikes by the CBN in the last 14 months.

However, the Director General of NECA, Mr Adewale-Smatt Oyerinde, while speaking in Lagos, noted that such an increase could be chaotic to the growth trajectory of the nation. He argued that it was apt that the apex bank collaborated with fiscal authorities in addressing the fundamentals behind the persistent increase in consumer prices which had defied the policy measures put in place by previous rate hikes.

“Tightening monetary policy stance by raising the anchor rate has proved ineffective, as inflation has been rising steadily and could climb as high as 25 per cent before year end.

“The focus of CBN should be on tackling the structural drivers of inflation, mostly the supply-side. In the light of hardship being experienced by the populace, it would have been appealing that the CBN retain the MPR for a while, in order to observe the impact of the current Executive Orders on the economy. We also understand the CBN’s stance that raising interest rates are needed to attract foreign inflows into the economy to moderate pressure on the foreign exchange rate,” he said.

He added that the organised sector believes that high cost of borrowing is injurious for business growth, stressing that amid tough business conditions, small and medium enterprises need to be supported with relatively low interest rates to stimulate access to liquidity.

Professor of Accounting and Financial Development at Lead City University, Ibadan, Prof Godwin Oyedokun, said the CBN should explore other alternatives as increased MPR has failed to address the soaring inflation in the country.

“CBN has been increasing the MPR over time but inflation keeps soaring. It is time to look at other means of working it now. They should explore other means. Inflation will continue if other parameters are not balanced,” he said.

 

Join Daily Trust WhatsApp Community For Quick Access To News and Happenings Around You.

UPDATE: Nigerians in Nigeria and those in diaspora can now be paid in US Dollars. Premium domains can earn you as much as $17,000 (₦27 million).


Click here to start earning.