MPC: Economists predict rates retention
Economic experts on Sunday expressed optimism that the Central Bank of Nigeria (CBN), Monetary Policy Committee (MPC), might retain interest rate due to rising inflation rate.
They made the projection during an interview with journalists in Lagos on expectations from the meeting slated for March 21 and March 22.
Prof. Ndubisi Nwokoma, Director, Centre for Economic Policy Analysis and Research (CEPAR), University of Lagos, predicted that the outcome of the meeting might hold rates.
“I think the meeting will be a mixed grill.
“Inflation is not falling as has been trending in the past few months.
“The last NBS report showed Inflation trended slightly upwards so it needs to be tamed by either holding rates or increasing slightly to restrict credit,” he said.
On the other hand, Nwokoma said that the preponderance of uncertainties in the economy would need making credit cheaper.
He said, for example, that the COVID-19 pandemic was still around, oil sector output was still below the OPEC quota and cost of production for firms was high with the operating environment not conducive.
Nwokoma advised that there is a need to stimulate production by making credit cheaper.
Also, Sheriffdeen Tella, Professor of Economics, Olabisi Onabanjo University, Ago-Iwoye, Ogun, also said that the MPC would likely retain the reserve requirements.
Tella, however, advised the MPC to say something about the state of the debts, including borrowing from the central bank with declining production and productivity.
Akpan Ekpo, Professor of Economics and Public Policy at the University of Uyo, Akwa Ibom, urged the MPC to marginally increase the monetary policy rate.
“Honestly, it is difficult to predict what will be the outcome of the MPC because of the global environment.
“The Ukraine-Russia war and the hike in interest rates by the Federal Reserve Bank of the USA; with inflation beginning to trend upwards and the Federal hike in rates as well as the Ukraine-Russia war, the MPC should marginally increase the monetary policy rate.
“This is to anticipate, that is, cushion the expected rise in inflation due to domestic bottlenecks and the global environment,” Ekpo said.
