Economy
A financial expert, Prof. Uche Uwaleke, says the Central Bank of Nigeria will soon put a halt to its incessant hike of the Monetary Policy Rate (MPR).
Uwaleke, the Director, Institute of Capital Market, Nasarawa State University, and President, Capital Market Academics of Nigeria, said this in an interview with the News Agency of Nigeria (NAN) on Wednesday in Abuja.
He said that the marginal increase in the MPR by 25 basis points, from 27.25 per cent to 22.50 per cent, was a sign that the rate hikes would soon stop.
According to him, in line with many analysts’ expectations, the Monetary Policy Committee (MPC) has increased the MPR yet again, but this time around by 25 basis points.
“I think the marginal rate increase is a signal that the CBN will completely pause or apply the brake beginning from the first quarter of next year.
“This has to happen to stem the rising cost of funds and negative impact on credit access so that small businesses in particular can breathe.” he said.
He said that it was regrettable that headline inflation had remained elevated and even resumed northwards in spite of the aggressive tightening measures by the CBN.
“The only area where one can see the benefits of the interest rate hikes has been in the Fx market where the impact of foreign portfolio inflows has helped to stabilise the exchange rate in the official window.
“The weak performance of the agriculture and manufacturing sectors as indicated in the NBS Q3 Gross Domestic Product (GDP) report may not be unconnected with rising interest and exchange rates.
“Indeed, the current macro-economic challenges make it imperative for a proper synergy between monetary and fiscal policies,” he said.
The News Agency of Nigeria (NAN) reports that the MPC announced a further raise of the MPR by 25 basis points to 27.50 per cent from 27.25 per cent at its 298th meeting on Tuesday.
The Governor of the CBN and Chairman of the MPC, Yemi Cardoso, announced the raise while presenting a communiqué after the meeting.
Cardoso, however, announced that the committee also decided to hold all other parameters constant.
The MPC, thus, retained the Cash Reserved Ratio (CRR)] at 50 per cent for Deposit Money Banks (DMBs) and 16 per cent for merchant banks, retained the Liquidity Ratio at 30 per cent, and also retained the Assymetric Corridor at +500/-100 basis points around the MPR.
Cardoso said that the decisions were unanimously adopted by all 12 members of the MPC who were present at the meeting.
The aggressive rates hikes by the CBN is aimed at combating inflation, stabilising the economy, and promoting economic growth.(NAN)
27th November, 2024.
C.E.
Tags: Monetary Policy Rate Prof. Uche Uwaleke
