How CBN/MPC failed to adhere to exports’ view by retaining interest rate at 14%
Again, the expectation of many on the possibility of MPC delivering according to popular hope that by reducing interest rate, more investments wiykd becattracted. But wrong the populace is as expectations hit the rock…Read more:
The Central Bank of Nigeria, through its MPC has tefused to listen to opiniin if economists advocating a reduction in the interest rate to a single digit.
Not even the submissions to it by experts and the business community that the interest rate should he prunned down could convince the Monetary Policy Committee to agree reduce Nigerian interest rate from its double digit of 14 pet cent.
The committee rose from its two-day meeting on Tuesday , with the Central Bank of Nigeria (CBN) Governor, Dodwin Emefiele, telling news hounds that the interest rate will remain unchanged at 14 per cent.
He said the decision of the committee at the end of meeting held at the apex bank’s headquarters in Abuja showed that the same circumstance that had made it impossible to effect a chsnge by fiiat still persists, though with some improvements.
Emefiele said only two members of the 11-man committee voted for adopting the recommendation of the experts, but majority of 6 voted against the motion.
He said apart from the MPR which was retained at 14 per cent, the committee also retained the Cash Reserves Ratio at 22.5 per cent.
Also retained are the Liquidity Ratio which was left at 30 per cent; and the Asymmetric Window which was left at +200 and -500 basis points around the MPR.
The CBN boss said the decision of the committee at the end of meeting held at the apex bank’s headquarters in Abuja showed that the same circumstance that had mafe it impossible to , by fiat review interest rate downwards still persists, thpigyh with some improvements.
But Mr Jodepgh Agbalaka , a financial analyst said the MPC had lost its chance if redeeming its name with its failure to do the right thing , caoablevof jump starting the weak economy.
“Other countries are driving towards zero per cent interest rate, but to reduce Nigeria’s borrowing cost is made look like impossible task.
” Apart from the oil sector, which other industry can rush to banks for loan these days? Reason being that high interest rate is killing such interest. ”