Following the increase in Monetary Policy Rate (MPR) to 17.5 per cent from 16.5 per cent by the Bankers’ Committee, the Lagos Chamber of Commerce and Industry (LCCI) has offered its support, saying the time for easing the rates may not have come at this time.
The Director-General of LCCI, Dr. Chinyere Almona, in a release made available to New Telegraph, reaffirmed that the apex bank resolved, among other issues, to increase MPR to 17.5 per cent from 16.5 per cent, retained the asymmetric corridor of +100/-700 basis points around the MPR, retained the CRR at 32.5 per cent and retain liquidity ratio at 30.0 per cent. She added also that the decision to further hike interest rates was to curb inflation, which has remained above 21 per cent.
Almona said: “Drawing close to a general election and with the factors driving food inflation still largely unresolved, we agree with the monetary authorities that the time for easing the rates may not have come at this time. “New initiatives include re-designing the naira notes, launching Nigeria’s first National Domestic Card Scheme to deepen the cashless economy, and the withdrawal limits.
“While we wait to see how these initiatives fare, there is bound to be some impact on spending, which may, in turn, affect the way we do business and the adjustments in the economy. We can predict that there will be some easing of the inflation rate in this first quarter.” Speaking further, the economic expert stressed: “We note the easing of the acceleration of inflation rates globally and equally the easing of monetary rates in some economies, but these are economies that have been able to tame their food inflation and its influence on headline inflation. “In Nigeria, we need to tackle food inflation from the roots looking at issues like targeted support to the agriculture sector, manufacturing and the provision of more export infrastructure for businesses to export more and earn more foreign exchange.” In addition, the LCCI DG stated: “We urge the CBN to look further inward at the peculiar situations driving inflationary pressures within the Nigerian economy. “Rate hikes are known to weaken growth, and as such, it is expected that the monetary and fiscal authorities intervene with policies and instruments that are growth-boosting.”