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  •  Financial experts have urged the Central Bank of Nigeria CBN to consider local solutions to the rising inflation against the frequent change of Monetary Policy Rate MPR The two experts Mrs Lolade Adesola with L A Consult and Mr Tunji Adepeju spoke in separate interviews with the News Agency of Nigeria in Ibadan on Thursday Adesola said the policy was to reduce excess liquidity in the economy because CBN believed that it was what has been driving inflation She said that the policy might not work in the country because adding the situation is what is called Stagflation this is because we don t have the economic growth along with the inflation Now that the interest rate has been increased and makes the cost of borrowing so high it will make it really difficult for small businesses to borrow for production again this will lead to stagflation in economic growth The approach is a textbook solution to inflation I don t really know if that would work because we don t have ordinary inflation in Nigeria but stagflation Adesola said She said that the way forward would be to continue to have intervention funds bring in cheaper loans for targeted sectors of the economy If those ones continue to borrow cheaply maybe it will work But if we just do a blanket increase in the interest rate across all sectors it may actually compound our problems Adesola said Contributing Mr Tunji Adepeju a Financial Consultant said the rationale behind the increase was best known to the committee on MPR Adepeju said that the present economic hardship was a global issue According to him this solution is similar to what the United Kingdom Government did But to the ordinary man I think this is a wrong step There is no way you will increase the interest rate and it would lead to more inflation We started from 11 per cent It moved to 14 per cent in July and now 15 5 per cent because it couldn t achieve what they wanted it to achieve The MPR rate will still increase by their next meeting Inflation is an increase in prices of goods and services For businesses an additional charge on the loan rate will be added to the cost of production which will drive prices of goods and services up Adepeju said He said inflation in the country was cost push and not demand driven adding that the cost of inputs diesel transportation and other materials used in production have the culminating effects on the selling price Adepeju said that as the cost of electricity diesel and transportation continue to go up inflation would continue to rise He urged members of the MPR committee to use real life situations as their consideration in any policy instead of statistics that do not show the economic reality of Nigerians in the open market The expert also said that an increase in banks Cash Reserves Ratio CRR would also affect deposit money banks whose investments failed in oil and gas electricity and other things NewsSourceCredit NAN
    Experts task CBN on local solutions to reduce inflation rate
     Financial experts have urged the Central Bank of Nigeria CBN to consider local solutions to the rising inflation against the frequent change of Monetary Policy Rate MPR The two experts Mrs Lolade Adesola with L A Consult and Mr Tunji Adepeju spoke in separate interviews with the News Agency of Nigeria in Ibadan on Thursday Adesola said the policy was to reduce excess liquidity in the economy because CBN believed that it was what has been driving inflation She said that the policy might not work in the country because adding the situation is what is called Stagflation this is because we don t have the economic growth along with the inflation Now that the interest rate has been increased and makes the cost of borrowing so high it will make it really difficult for small businesses to borrow for production again this will lead to stagflation in economic growth The approach is a textbook solution to inflation I don t really know if that would work because we don t have ordinary inflation in Nigeria but stagflation Adesola said She said that the way forward would be to continue to have intervention funds bring in cheaper loans for targeted sectors of the economy If those ones continue to borrow cheaply maybe it will work But if we just do a blanket increase in the interest rate across all sectors it may actually compound our problems Adesola said Contributing Mr Tunji Adepeju a Financial Consultant said the rationale behind the increase was best known to the committee on MPR Adepeju said that the present economic hardship was a global issue According to him this solution is similar to what the United Kingdom Government did But to the ordinary man I think this is a wrong step There is no way you will increase the interest rate and it would lead to more inflation We started from 11 per cent It moved to 14 per cent in July and now 15 5 per cent because it couldn t achieve what they wanted it to achieve The MPR rate will still increase by their next meeting Inflation is an increase in prices of goods and services For businesses an additional charge on the loan rate will be added to the cost of production which will drive prices of goods and services up Adepeju said He said inflation in the country was cost push and not demand driven adding that the cost of inputs diesel transportation and other materials used in production have the culminating effects on the selling price Adepeju said that as the cost of electricity diesel and transportation continue to go up inflation would continue to rise He urged members of the MPR committee to use real life situations as their consideration in any policy instead of statistics that do not show the economic reality of Nigerians in the open market The expert also said that an increase in banks Cash Reserves Ratio CRR would also affect deposit money banks whose investments failed in oil and gas electricity and other things NewsSourceCredit NAN
    Experts task CBN on local solutions to reduce inflation rate
    Economy1 week ago

    Experts task CBN on local solutions to reduce inflation rate

    Financial experts have urged the Central Bank of Nigeria (CBN) to consider local solutions to the rising inflation against the frequent change of Monetary Policy Rate (MPR).

    The two experts, Mrs Lolade Adesola with L.

    A. Consult and Mr Tunji Adepeju, spoke in separate interviews with the News Agency of Nigeria in Ibadan on Thursday.

    Adesola said the policy was to reduce excess liquidity in the economy, because CBN believed that it was what has been driving inflation.

    She said that the policy might not work in the country because, adding “the situation is what is called ‘Stagflation’; this is because we don’t have the economic growth along with the inflation.

    “Now that the interest rate has been increased and makes the cost of borrowing so high, it will make it really difficult for small businesses to borrow for production; again, this will lead to stagflation in economic growth.

    “The approach is a textbook solution to inflation.

    “I don’t really know if that would work because we don’t have ordinary inflation in Nigeria, but stagflation,” Adesola said.

    She said that the way forward would be to continue to have intervention funds; bring in cheaper loans for targeted sectors of the economy.

    “If those ones continue to borrow cheaply, maybe it will work.

    “But, if we just do a blanket increase in the interest rate across all sectors, it may actually compound our problems,” Adesola said.

    Contributing, Mr Tunji Adepeju, a Financial Consultant, said the rationale behind the increase was best known to the committee on MPR.

    Adepeju said that the present economic hardship was a global issue.

    According to him, this solution is similar to what the United Kingdom Government did.

    But to the ordinary man, I think this is a wrong step.

    “There is no way you will increase the interest rate and it would lead to more inflation.

    “We started from 11 per cent.

    It moved to 14 per cent in July and now 15.5 per cent, because it couldn’t achieve what they wanted it to achieve.

    “The MPR rate will still increase by their next meeting.

    “Inflation is an increase in prices of goods and services.

    For businesses, an additional charge on the loan rate will be added to the cost of production which will drive prices of goods and services up,” Adepeju said.

    He said inflation in the country was cost push and not demand-driven, adding that the cost of inputs, diesel, transportation and other materials used in production have the culminating effects on the selling price.

    Adepeju said that as the cost of electricity, diesel and transportation continue to go up, inflation would continue to rise.

    He urged members of the MPR committee to use real life situations as their consideration in any policy, instead of statistics that do not show the economic reality of Nigerians in the open market.

    The expert also said that an increase in banks Cash Reserves Ratio (CRR) would also affect deposit money banks, whose investments failed in oil and gas, electricity and other things.


    NewsSourceCredit: NAN

  •  The Central Bank of Nigeria CBN says its Monetary Policy Committe MPC decision to increase Monetary Policy Rate MPR is to control rising inflation Hassan Mahmoud CBN s director Monetary Policy Department said this on Wednesday at a post MPC briefing tagged Unveiling Facts behind the Figures The News Agency of Nigeria reports that the MPC in its 287th meeting on Tuesday had increased the MPR by 150 basis points from 14 per cent to 15 5 per cent The MPR is the baseline interest rate in an economy on which other interest rates within that economy are built on The CBN Governor Mr Godwin Emefiele had said that the decision was informed by persistent rise in inflation rate and fragile economic growth According to Mahmud the MPC got to a point where stringent measures have to be taken to control inflation He said that the committee took cognisance of global as well as local economic issues in arriving at its policy decisions We raised the MPR because it is necessary to do so The quantity of money in the system was too much for the economy to absorb he said He said that monetary policy tools were meant to deal with short term risks adding that the idea was to make cost of funds expensive to drive down inflation According to Mahmud the stimuluses that governments across the world provided for their citizens during COVID 19 increased the ability of people to spend thereby creating challenges with global supply A lot of households and small businesses were injected with stimuluses the U S did two trillion dollars Nigeria did about five trillion Naira these increased the ability of people to spend But the supply side could not meet up with the demand because that volume of injection was far more than the regular intake for those economies this made prices to go up he said He also blamed the Russian Ukraine war as well as the resurgence of COVID 19 in China as responsible for rise in global inflationary trend That region accounts for more than 50 per cent of global commodity supply and 38 per cent of global oil and gas supply The war resulted to some shortages which made prices to go up Then the COVID 19 lockdown in China The country is the largest importer of commodities across the globe he said Speaking on the various economic intervention initiatives by the apex bank and the prospect of recouping the funds Dr Yusuf Yila director Development Finance Department said about nine trillion Naira had been invested in the various development finance interventions He however said that all the monies would be recovered According to Yila N9 3 trillion has been invested in various development finance interventions out of which N3 7 trillion has been repaid Most of the loans are still under moratorium especially those in manufacturing Manufacturing forms the largest part of our portfolio about 31 per cent he said He however said that one of the best performing interventions was the Commercial Agriculture Credit Scheme CACS where out of the N800 billion that was lent out about N700 billion had been repaid Yila said that through the flagship agriculture intervention scheme the Anchor Borrowers Programme one trillion Naira had been lent out to small holder farmers while about N400 billion has so far been recovered According to him the department will restrict intervention to critical sectors like the SMEs and the electricity sector for now Speaking on the depreciation of the Naira the Director Trade and Exchange Department Mrs Ozoemena Nnaji said the apex bank was taking steps to firm up the currency Nnaji said that demand for foreign exchange outstripped supply currency adding that the CBN was doing a lot to mop up supply One of the steps is the Naira for dollar remittance drive which has resulted to a huge increase in diaspora remittances There is also the RT200 bringing in forex Repatriation has gone up from 20 million dollars in the first quarter to about 600 million dollars in the second quarter In this third quarter we are looking at more than one billion dollars of repatriated inflows she said NewsSourceCredit NAN
    MPC increased rates as measure to control inflation- CBN  
     The Central Bank of Nigeria CBN says its Monetary Policy Committe MPC decision to increase Monetary Policy Rate MPR is to control rising inflation Hassan Mahmoud CBN s director Monetary Policy Department said this on Wednesday at a post MPC briefing tagged Unveiling Facts behind the Figures The News Agency of Nigeria reports that the MPC in its 287th meeting on Tuesday had increased the MPR by 150 basis points from 14 per cent to 15 5 per cent The MPR is the baseline interest rate in an economy on which other interest rates within that economy are built on The CBN Governor Mr Godwin Emefiele had said that the decision was informed by persistent rise in inflation rate and fragile economic growth According to Mahmud the MPC got to a point where stringent measures have to be taken to control inflation He said that the committee took cognisance of global as well as local economic issues in arriving at its policy decisions We raised the MPR because it is necessary to do so The quantity of money in the system was too much for the economy to absorb he said He said that monetary policy tools were meant to deal with short term risks adding that the idea was to make cost of funds expensive to drive down inflation According to Mahmud the stimuluses that governments across the world provided for their citizens during COVID 19 increased the ability of people to spend thereby creating challenges with global supply A lot of households and small businesses were injected with stimuluses the U S did two trillion dollars Nigeria did about five trillion Naira these increased the ability of people to spend But the supply side could not meet up with the demand because that volume of injection was far more than the regular intake for those economies this made prices to go up he said He also blamed the Russian Ukraine war as well as the resurgence of COVID 19 in China as responsible for rise in global inflationary trend That region accounts for more than 50 per cent of global commodity supply and 38 per cent of global oil and gas supply The war resulted to some shortages which made prices to go up Then the COVID 19 lockdown in China The country is the largest importer of commodities across the globe he said Speaking on the various economic intervention initiatives by the apex bank and the prospect of recouping the funds Dr Yusuf Yila director Development Finance Department said about nine trillion Naira had been invested in the various development finance interventions He however said that all the monies would be recovered According to Yila N9 3 trillion has been invested in various development finance interventions out of which N3 7 trillion has been repaid Most of the loans are still under moratorium especially those in manufacturing Manufacturing forms the largest part of our portfolio about 31 per cent he said He however said that one of the best performing interventions was the Commercial Agriculture Credit Scheme CACS where out of the N800 billion that was lent out about N700 billion had been repaid Yila said that through the flagship agriculture intervention scheme the Anchor Borrowers Programme one trillion Naira had been lent out to small holder farmers while about N400 billion has so far been recovered According to him the department will restrict intervention to critical sectors like the SMEs and the electricity sector for now Speaking on the depreciation of the Naira the Director Trade and Exchange Department Mrs Ozoemena Nnaji said the apex bank was taking steps to firm up the currency Nnaji said that demand for foreign exchange outstripped supply currency adding that the CBN was doing a lot to mop up supply One of the steps is the Naira for dollar remittance drive which has resulted to a huge increase in diaspora remittances There is also the RT200 bringing in forex Repatriation has gone up from 20 million dollars in the first quarter to about 600 million dollars in the second quarter In this third quarter we are looking at more than one billion dollars of repatriated inflows she said NewsSourceCredit NAN
    MPC increased rates as measure to control inflation- CBN  
    Economy1 week ago

    MPC increased rates as measure to control inflation- CBN  

    The Central Bank of Nigeria (CBN) says its Monetary Policy Committe (MPC) decision to increase Monetary Policy Rate (MPR) is to control rising inflation.

    Hassan Mahmoud, CBN’s director, Monetary Policy Department said this on Wednesday at a post-MPC briefing tagged: “Unveiling Facts behind the Figures’’.

    The News Agency of Nigeria reports that the MPC, in its 287th meeting on Tuesday, had increased the MPR by 150 basis points, from 14 per cent to 15.5 per cent.

    The MPR is the baseline interest rate in an economy on which other interest rates within that economy are built on.

    The CBN Governor, Mr Godwin Emefiele had said that the decision was informed by persistent rise in inflation rate and fragile economic growth.

    According to Mahmud, the MPC got to a point where stringent measures have to be taken to control inflation.

    He said that the committee took cognisance of global as well as local economic issues in arriving at its policy decisions.

    “We raised the MPR because it is necessary to do so.

    The quantity of money in the system was too much for the economy to absorb,’’ he said.

    He said that monetary policy tools were meant to deal with short term risks, adding that the idea was to make cost of funds expensive to drive down inflation.

    According to Mahmud, the stimuluses that governments across the world provided for their citizens during COVID-19 increased the ability of people to spend, thereby, creating challenges with global supply.

    “A lot of households and small businesses were injected with stimuluses; the U.

    S did two trillion dollars, Nigeria did about five trillion Naira, these increased the ability of people to spend.

    “But the supply side could not meet up with the demand because that volume of injection was far more than the regular intake for those economies, this made prices to go up,’’ he said.

    He also blamed the Russian-Ukraine war, as well as the resurgence of COVID-19 in China as responsible for rise in global inflationary trend.

    “That region accounts for more than 50 per cent of global commodity supply and 38 per cent of global oil and gas supply.

    “The war resulted to some shortages which made prices to go up.

    “Then the COVID-19 lockdown in China.

    The country is the largest importer of commodities across the globe,’’ he said.

    Speaking on the various economic intervention initiatives by the apex bank and the prospect of recouping the funds, Dr Yusuf Yila, director, Development Finance Department, said about nine trillion Naira had been invested in the various development finance interventions.

    He, however, said that all the monies would be recovered.

    According to Yila, N9.3 trillion has been invested in various development finance interventions, out of which N3.7 trillion has been repaid.

    “Most of the loans are still under moratorium, especially those in manufacturing.

    Manufacturing forms the largest part of our portfolio, about 31 per cent,’’ he said.

    He, however, said that one of the best performing interventions was the Commercial Agriculture Credit Scheme (CACS), where out of the N800 billion that was lent out, about N700 billion had been repaid.

    Yila said that through the flagship agriculture intervention scheme, the Anchor Borrowers Programme, one trillion Naira had been lent out to small holder farmers, while about N400 billion has so far been recovered.

    According to him, the department will restrict intervention to critical sectors like the SMEs and the electricity sector for now.

    Speaking on the depreciation of the Naira, the Director, Trade and Exchange Department, Mrs Ozoemena Nnaji, said the apex bank was taking steps to firm up the currency.

    Nnaji said that demand for foreign exchange outstripped supply currency, adding that the CBN was doing a lot to mop up supply.

    “One of the steps is the Naira for dollar remittance drive, which has resulted to a huge increase in diaspora remittances.

    “There is also the RT200 bringing in forex.

    Repatriation has gone up from 20 million dollars in the first quarter to about 600 million dollars in the second quarter.

    “In this third quarter we are looking at more than one billion dollars of repatriated inflows,’’ she said.


    NewsSourceCredit: NAN

  •  The Monetary Policy Committee MPC of the CBN increased Monetary Policy Rate MPR from 14 per cent to 15 5 per cent on Tuesday to tame inflation The committee had increased the MPR by a total of 250 basis points at its last two meetings The MPR is the baseline interest rate in an economy every other interest rate used within that economy is built on it CBN Governor Mr Godwin Emefiele announced the new rate after the September bi monthly MPC meeting in Abuja The News Agency of Nigeria reports that this is the third consecutive hike of the MPR the benchmark interest rate for the country s financial market in 2022 The MPC also raised Cash Reserve Ratio to 32 5 per cent from 27 5 per cent while holding other parameters constant The Asymmetric Corridor thus remains at 100 700 basis points around the MPR and the Liquidity Ratio remains at 30 per cent Asymmetric interest rate corridor is a new tool developed to increase the flexibility of monetary policy It provides the ability to make timely responses to external finance or risk sentiment shocks through active management of daily open market operations The MPC noted with concern the continued aggressive movement in inflation even after the rate hike at its meeting in May and July It expressed its unrelenting resolve to restore price stability while providing the necessary support to strengthen the fragile recovery Emefiele said Some experts had earlier projected that the CBN would increase the rates to rein in inflation Prof Umhe Uwaleke an economist had said the MPC would increase the MPR again by at least 50 basis points Uwaleke a Professor of Capital Market at Nasarawa State University said that his projection was informed by rising inflation Aside inflationary pressure and the need to tame it the MPC would be considering current global monetary developments such as the hike in policy rates by central banks in developed countries For example the U S Federal Reserve recently increased the benchmark rate by 75 basis points while the Bank of England increased by 50 basis points he had said Uwaleke said that monetary tightening by central banks of U S and the UK continued to trigger capital outflows from Nigeria with negative implications on the exchange rate The MPC would equally consider this as justification to increase the MPR he said He however urged the MPC to hold the prevailing rates constant as tightening may not tame inflationary trend Be that as it may if I were a member of the MPC I would vote for a hold position In other words I would advise that the policy rates be held This is because the major drivers of inflation in Nigeria today are cost push related rather than demand pull Furthermore policy tightening may not really tame inflationary pressures that are stemming more from high cost of energy and negative impact of insecurity on food output Any hike in rate at this time will hurt output growth through higher cost of lending to SMEs he said Dr Tope Fasua another economist urged the MPC to retain the subsisting rates as past rates increases had not tamed inflation I expect that they may further raise rates My advice to the MPC would be that they hold rates We have raised rates by 250 basis points in the last two meetings but inflation has surged further This means that our own inflation is not tightly linked with interest rates and may recede in its own time Ours is a bit of a carryover from the COVID 19 era of production shutdown and imported inflation because our economy is dependent on foreign ones battling inflation presently he explained According to Fasua raising rates further will only be a continuation of punishment for local industries which borrow locally and are struggling to achieve previous levels of production post Covid 19 Banks are always quick to raise lending rates anyway The CBN had to recently force them to increase savings rates Their margins are always so high so the committee and the CBN must be careful about raising rates ad infinitum Fasua said NewsSourceCredit NAN
    For third consecutive time, CBN hikes Monetary Policy Rate to 15.5%
     The Monetary Policy Committee MPC of the CBN increased Monetary Policy Rate MPR from 14 per cent to 15 5 per cent on Tuesday to tame inflation The committee had increased the MPR by a total of 250 basis points at its last two meetings The MPR is the baseline interest rate in an economy every other interest rate used within that economy is built on it CBN Governor Mr Godwin Emefiele announced the new rate after the September bi monthly MPC meeting in Abuja The News Agency of Nigeria reports that this is the third consecutive hike of the MPR the benchmark interest rate for the country s financial market in 2022 The MPC also raised Cash Reserve Ratio to 32 5 per cent from 27 5 per cent while holding other parameters constant The Asymmetric Corridor thus remains at 100 700 basis points around the MPR and the Liquidity Ratio remains at 30 per cent Asymmetric interest rate corridor is a new tool developed to increase the flexibility of monetary policy It provides the ability to make timely responses to external finance or risk sentiment shocks through active management of daily open market operations The MPC noted with concern the continued aggressive movement in inflation even after the rate hike at its meeting in May and July It expressed its unrelenting resolve to restore price stability while providing the necessary support to strengthen the fragile recovery Emefiele said Some experts had earlier projected that the CBN would increase the rates to rein in inflation Prof Umhe Uwaleke an economist had said the MPC would increase the MPR again by at least 50 basis points Uwaleke a Professor of Capital Market at Nasarawa State University said that his projection was informed by rising inflation Aside inflationary pressure and the need to tame it the MPC would be considering current global monetary developments such as the hike in policy rates by central banks in developed countries For example the U S Federal Reserve recently increased the benchmark rate by 75 basis points while the Bank of England increased by 50 basis points he had said Uwaleke said that monetary tightening by central banks of U S and the UK continued to trigger capital outflows from Nigeria with negative implications on the exchange rate The MPC would equally consider this as justification to increase the MPR he said He however urged the MPC to hold the prevailing rates constant as tightening may not tame inflationary trend Be that as it may if I were a member of the MPC I would vote for a hold position In other words I would advise that the policy rates be held This is because the major drivers of inflation in Nigeria today are cost push related rather than demand pull Furthermore policy tightening may not really tame inflationary pressures that are stemming more from high cost of energy and negative impact of insecurity on food output Any hike in rate at this time will hurt output growth through higher cost of lending to SMEs he said Dr Tope Fasua another economist urged the MPC to retain the subsisting rates as past rates increases had not tamed inflation I expect that they may further raise rates My advice to the MPC would be that they hold rates We have raised rates by 250 basis points in the last two meetings but inflation has surged further This means that our own inflation is not tightly linked with interest rates and may recede in its own time Ours is a bit of a carryover from the COVID 19 era of production shutdown and imported inflation because our economy is dependent on foreign ones battling inflation presently he explained According to Fasua raising rates further will only be a continuation of punishment for local industries which borrow locally and are struggling to achieve previous levels of production post Covid 19 Banks are always quick to raise lending rates anyway The CBN had to recently force them to increase savings rates Their margins are always so high so the committee and the CBN must be careful about raising rates ad infinitum Fasua said NewsSourceCredit NAN
    For third consecutive time, CBN hikes Monetary Policy Rate to 15.5%
    Economy1 week ago

    For third consecutive time, CBN hikes Monetary Policy Rate to 15.5%

    The Monetary Policy Committee (MPC) of the CBN increased Monetary Policy Rate (MPR) from 14 per cent to 15.5 per cent on Tuesday to tame inflation.

    The committee had increased the MPR by a total of 250 basis points at its last two meetings.

    The MPR is the baseline interest rate in an economy; every other interest rate used within that economy is built on it.

    CBN Governor, Mr Godwin Emefiele, announced the new rate after the September bi-monthly MPC meeting in Abuja.

    The News Agency of Nigeria reports that this is the third consecutive hike of the MPR, the benchmark interest rate for the country’s financial market in 2022. The MPC also raised Cash Reserve Ratio to 32.5 per cent from 27.5 per cent while holding other parameters constant.

    The Asymmetric Corridor, thus, remains at +100-700 basis points around the MPR, and the Liquidity Ratio remains at 30 per cent.

    Asymmetric interest rate corridor is a new tool developed to increase the flexibility of monetary policy.

    It provides the ability to make timely responses to external finance or risk sentiment shocks through active management of daily open market operations.

    “The MPC noted with concern the continued aggressive movement in inflation, even after the rate hike at its meeting in May and July. “It expressed its unrelenting resolve to restore price stability while providing the necessary support to strengthen the fragile recovery, Emefiele said.

    Some experts had earlier projected that the CBN would increase the rates to rein in inflation.

    Prof. Umhe Uwaleke, an economist, had said the MPC would increase the MPR again, by at least, 50 basis points.

    Uwaleke, a Professor of Capital Market at Nasarawa State University, said that his projection was informed by rising inflation.

    “Aside inflationary pressure and the need to tame it, the MPC would be considering current global monetary developments such as the hike in policy rates by central banks in developed countries.

    “For example, the U.

    S. Federal Reserve recently increased the benchmark rate by 75 basis points, while the Bank of England increased by 50 basis points,’’ he had said.

    Uwaleke said that monetary tightening by central banks of U.

    S. and the UK continued to trigger capital outflows from Nigeria with negative implications on the exchange rate.

    “The MPC would equally consider this as justification to increase the MPR,’’’ he said.

    He, however, urged the MPC to hold the prevailing rates constant as tightening may not tame inflationary trend.

    “Be that as it may, if I were a member of the MPC, I would vote for a hold position.

    In other words, I would advise that the policy rates be held.

    “This is because the major drivers of inflation in Nigeria today are cost-push related rather than demand-pull.

    “Furthermore, policy tightening may not really tame inflationary pressures that are stemming more from high cost of energy and negative impact of insecurity on food output.

    “Any hike in rate at this time will hurt output growth through higher cost of lending to SMEs,’’ he said.

    Dr Tope Fasua, another economist, urged the MPC to retain the subsisting rates as past rates increases had not tamed inflation.

    “I expect that they may further raise rates.

    My advice to the MPC would be that they hold rates.

    “We have raised rates by 250 basis points in the last two meetings but inflation has surged further.

    “This means that our own inflation is not tightly linked with interest rates and may recede in its own time.

    “Ours is a bit of a carryover from the COVID-19 era of production shutdown and imported inflation because our economy is dependent on foreign ones battling inflation presently,’’ he explained.

    According to Fasua, raising rates further will only be a continuation of punishment for local industries which borrow locally and are struggling to achieve previous levels of production post Covid-19. “Banks are always quick to raise lending rates anyway.

    The CBN had to recently force them to increase savings rates.

    “Their margins are always so high, so the committee and the CBN must be careful about raising rates ad infinitum,’’ Fasua said.


    NewsSourceCredit: NAN

  •  The Association of Bureaux Des Change Operators of Nigeria ABCON has urged the Central Bank of Nigeria CBN to float the Naira to halt its further depreciation The President of ABCON Alhaji Aminu Gwadabe made the appeal on Saturday in an interview with the News Agency of Nigeria in Lagos Gwadabe said that the CBN should do all within its powers to undertake a sustained injection of dollar in the market to reverse the loss in the value of the naira at the parallel market It might sound counterintuitive but the way out of the current frenzy is to abolish the official fixed exchange rate and allow the Naira to float CBN should contemporaneously undertake a large scale dollar intervention in the open market that can inspire confidence in the Naira and checkmate the current tailspin Once there is a significant positive movement the market will react and in all probability spur an avalanche of panic selling and further buoy the Naira Gwadabe said The financial expert said that the CBN could gradually buy back the Dollars used in its intervention from the open market at a lower exchange rate for a decent profit He argued that the the next phase would be to strengthen the Naira in the medium to long term adding that both fiscal and monetary policies should be aligned to stimulate the tradable sector On CBN s Monetary Policy Rate MPR at 13 per cent Gwadabe said that the adjusted rate would stifle growth He said efforts targeted at reducing Inflation in an underperforming economy should focus on stimulating the supply side Increasing the MPR contracts the supply side it is the wrong prescription Let s not copy the Americans who target inflation with FED rates to curb money supply their factors of production have been fully mobilized ours is at less than 20 per cent and requires stimulation of the supply side Lowering the MPR to around 5 per cent looks more appropriate The U S per capita GDP is around 66 000 dollars ours is 1 500 in real terms which underscores the need for a pro supply side monetary policy Gwadabe said He said the CBN should reverse his mandate to banks to pay recipients of Diaspora remittances in dollars According to him most of the dollars end up under pillows outside of the mainstream banking system with no utility for capital mobilization and imports It fuels currency substitution it puts pressure on the Naira exchange rate and inflation and does not have a statutory backing unlike Domiciliary accounts therefore it is illegal Gwadabe said The ABCON boss said that Nigeria had a long history of stifling the tradable sector oil excluded first through the Commodity Boards the Arbitrage Kingpins the bastion of corruption that straddled the export ecosphere whom Babangida dismembered in 1986 They bought low at the farm gates and sold high at the international export markets much of the difference ended up in their private pockets They impoverished the cocoa groundnut palm oil producers etc and eventually drove them out of business not oil Today they have reincarnated as plethora of gatekeepers including the Nigerian Export Supervision Scheme at the ports exacting tolls from exporters Poor infrastructure power supply and generally unskilled labor further compound the weakness of our tradable sector Any wonder why Ghana s annual non oil export is 13 1 billion dollars while Nigeria s is 1 3 billion dollars We have a long way to go Gwadabe said He said that all the indices suggest that the Naira holds more of a downside potential than it does of an upside because the present monetary and fiscal authorities will continue to tether in the zone of docility The ABCON boss said the fall of the Naira is fueled majorly by the innate desire for self preservation of some people and corporates who substitute a weaker currency for a stronger one He said that the paradigm has evolved over time to the current crescendo of panic buying of forex most of which will end up under pillows and Offshore He said that this phenomenon can t be adjudicated by the authorities it s typical consumer behaviour Nigerians are sitting on an estimated 100 billion dollars chest outside the country s mainstream banking system Today s panic buying causes currency to drop in value thereby inducing tomorrow s panic buying which in turn results in further decline of the value of the currency and so forth Panic buying is driven more by psychology and less by economic fundamentals so the solution has to be psychological too Gwadabe said NewsSourceCredit NAN
    Depreciation: ABCON urges CBN to float Naira
     The Association of Bureaux Des Change Operators of Nigeria ABCON has urged the Central Bank of Nigeria CBN to float the Naira to halt its further depreciation The President of ABCON Alhaji Aminu Gwadabe made the appeal on Saturday in an interview with the News Agency of Nigeria in Lagos Gwadabe said that the CBN should do all within its powers to undertake a sustained injection of dollar in the market to reverse the loss in the value of the naira at the parallel market It might sound counterintuitive but the way out of the current frenzy is to abolish the official fixed exchange rate and allow the Naira to float CBN should contemporaneously undertake a large scale dollar intervention in the open market that can inspire confidence in the Naira and checkmate the current tailspin Once there is a significant positive movement the market will react and in all probability spur an avalanche of panic selling and further buoy the Naira Gwadabe said The financial expert said that the CBN could gradually buy back the Dollars used in its intervention from the open market at a lower exchange rate for a decent profit He argued that the the next phase would be to strengthen the Naira in the medium to long term adding that both fiscal and monetary policies should be aligned to stimulate the tradable sector On CBN s Monetary Policy Rate MPR at 13 per cent Gwadabe said that the adjusted rate would stifle growth He said efforts targeted at reducing Inflation in an underperforming economy should focus on stimulating the supply side Increasing the MPR contracts the supply side it is the wrong prescription Let s not copy the Americans who target inflation with FED rates to curb money supply their factors of production have been fully mobilized ours is at less than 20 per cent and requires stimulation of the supply side Lowering the MPR to around 5 per cent looks more appropriate The U S per capita GDP is around 66 000 dollars ours is 1 500 in real terms which underscores the need for a pro supply side monetary policy Gwadabe said He said the CBN should reverse his mandate to banks to pay recipients of Diaspora remittances in dollars According to him most of the dollars end up under pillows outside of the mainstream banking system with no utility for capital mobilization and imports It fuels currency substitution it puts pressure on the Naira exchange rate and inflation and does not have a statutory backing unlike Domiciliary accounts therefore it is illegal Gwadabe said The ABCON boss said that Nigeria had a long history of stifling the tradable sector oil excluded first through the Commodity Boards the Arbitrage Kingpins the bastion of corruption that straddled the export ecosphere whom Babangida dismembered in 1986 They bought low at the farm gates and sold high at the international export markets much of the difference ended up in their private pockets They impoverished the cocoa groundnut palm oil producers etc and eventually drove them out of business not oil Today they have reincarnated as plethora of gatekeepers including the Nigerian Export Supervision Scheme at the ports exacting tolls from exporters Poor infrastructure power supply and generally unskilled labor further compound the weakness of our tradable sector Any wonder why Ghana s annual non oil export is 13 1 billion dollars while Nigeria s is 1 3 billion dollars We have a long way to go Gwadabe said He said that all the indices suggest that the Naira holds more of a downside potential than it does of an upside because the present monetary and fiscal authorities will continue to tether in the zone of docility The ABCON boss said the fall of the Naira is fueled majorly by the innate desire for self preservation of some people and corporates who substitute a weaker currency for a stronger one He said that the paradigm has evolved over time to the current crescendo of panic buying of forex most of which will end up under pillows and Offshore He said that this phenomenon can t be adjudicated by the authorities it s typical consumer behaviour Nigerians are sitting on an estimated 100 billion dollars chest outside the country s mainstream banking system Today s panic buying causes currency to drop in value thereby inducing tomorrow s panic buying which in turn results in further decline of the value of the currency and so forth Panic buying is driven more by psychology and less by economic fundamentals so the solution has to be psychological too Gwadabe said NewsSourceCredit NAN
    Depreciation: ABCON urges CBN to float Naira
    Economy2 months ago

    Depreciation: ABCON urges CBN to float Naira

    The Association of Bureaux Des Change Operators of Nigeria (ABCON) has urged the Central Bank of Nigeria (CBN) to float the Naira to halt its further depreciation.

    The President of ABCON, Alhaji Aminu Gwadabe, made the appeal on Saturday in an interview with the News Agency of Nigeria in Lagos.

    Gwadabe said that the CBN should do all within its powers to undertake a sustained injection of dollar in the market to reverse the loss in the value of the naira at the parallel market.

    “It might sound counterintuitive but the way out of the current frenzy is to abolish the official fixed exchange rate and allow the Naira to float.

    “CBN should contemporaneously undertake a large-scale dollar intervention in the open market that can inspire confidence in the Naira and checkmate the current tailspin.

    “Once there is a significant positive movement, the market will react and, in all probability, spur an avalanche of panic selling and further buoy the Naira,” Gwadabe said.

    The financial expert said that the CBN could gradually buy back the Dollars used in its intervention from the open market at a lower exchange rate for a decent profit.

    He argued that the the next phase would be to strengthen the Naira in the medium to long-term, adding that both fiscal and monetary policies should be aligned to stimulate the tradable sector.

    On CBN’s Monetary Policy Rate (MPR) at 13 per cent, Gwadabe said that the adjusted rate would stifle growth.

    He said efforts targeted at reducing Inflation in an underperforming economy should focus on stimulating the supply side.

    “Increasing the MPR contracts the supply side, it is the wrong prescription.

    “Let’s not copy the Americans who target inflation with FED rates to curb money supply; their factors of production have been fully mobilized, ours is at less than 20 per cent and requires stimulation of the supply side.

    “Lowering the MPR to around 5 per cent looks more appropriate.

    “The U.

    S. per capita GDP is around 66,000 dollars, ours is $1,500 in real terms which underscores the need for a pro supply side monetary policy,” Gwadabe said.

    He said the CBN should reverse his mandate to banks to pay recipients of Diaspora remittances in dollars.

    According to him, most of the dollars end up under pillows outside of the mainstream banking system with no utility for capital mobilization and imports.

    “It fuels currency substitution, it puts pressure on the Naira exchange rate and inflation and does not have a statutory backing unlike Domiciliary accounts, therefore, it is illegal,” Gwadabe said.

    The ABCON boss said that Nigeria  had a long history of stifling the tradable sector (oil excluded), first through the Commodity Boards, the Arbitrage Kingpins, the bastion of corruption that straddled the export ecosphere whom Babangida dismembered in 1986. “They bought low at the farm gates and sold high at the international export markets, much of the difference ended up in their private pockets.

    “They impoverished the cocoa, groundnut, palm oil producers, etc.

    and eventually drove them out of business, not oil.

    “Today, they have reincarnated as plethora of gatekeepers including the Nigerian Export Supervision Scheme at the ports exacting tolls from exporters.

    “Poor infrastructure, power supply and generally unskilled labor further compound the weakness of our tradable sector.

    “Any wonder why Ghana’s annual non-oil export is 13.1 billion dollars, while Nigeria’s is 1.3 billion dollars, We have a long way to go,” Gwadabe said.

    He said that all the indices suggest that the Naira holds more of a downside potential than it does of an upside because the present monetary and fiscal authorities will continue to tether in the zone of docility.

    The ABCON boss said the fall of the Naira is fueled majorly by the innate desire for self-preservation of some people and corporates who substitute a weaker currency for a stronger one.

    He said that the paradigm has evolved over time to the current crescendo of panic buying of forex, most of which will end up under pillows and Offshore.

    He said that this phenomenon can’t be adjudicated by the authorities.

    “it’s typical consumer behaviour.

    Nigerians are sitting on an estimated 100 billion dollars chest outside the country’s mainstream banking system.

    “Today’s panic buying causes currency to drop in value thereby inducing tomorrow’s panic buying which in turn results in further decline of the value of the currency and so forth.

    “Panic buying is driven more by psychology and less by economic fundamentals, so the solution has to be psychological too,” Gwadabe said.


    NewsSourceCredit: NAN

  •  The Manufacturers Association of Nigeria MAN has described the decision to increase the Monetary Policy Rate MPR from 13 per cent to 14 as a journey further away from the preferred single digit interest rate regime MAN Director General Mr Segun Ajayi Kadir in a report on Friday in Lagos said the development was not manufacturing friendly considering the myriad of binding constraints already limiting the performance of the sector The News Agency of Nigeria reports that the Monetary Policy Committee MPC of the Central Bank of Nigeria CBN reviewed the MPR upwards by one per cent in response to Nigeria s economic realities The MPC however retained the asymmetric corridor of 100 700 basis points around the MPR Cash Reserve Ratio CRR at 27 per cent and Liquidity Ratio at 30 per cent Ajayi Kadir expressed hope that the stringent conditions for accessing available development funding windows with the CBN would be relaxed to improve the flow of long term loans to the manufacturing sector at single digit interest rate The MAN DG urged the MPC in future adjustments of MPR to take into consideration the trend of core inflation rather than basing decision on headline and food inflation This he said would shield the sector from the backlashes from the 14 per cent MPR ramp up production and guarantee sustained growth in the overall best interest of the economy This is another level of increase in interest rates on loanable funds which will no doubt upscale the intensity of the crowding out effect on the private sector businesses as firms have lesser access to funds in the credit market It will spur upward review of existing lending rates which will drive costs Northward intensify demand crunch increase cost of manufacturing exacerbate the intensity of idle capital assets and reduce capacity utilisation MAN strongly believe that high inflation is a major indication of macroeconomic inadequacies and failure to take steps to address the contributory factors will further limit economic growth and increase the rate of unemployment in the country The MPC must in future adjustments of MPR take into consideration the trend of core inflation rather than basing decision on headline and food inflation he said Addressing the June inflation figure of 18 6 per cent Ajayi Kadir said the rate which had assumed an upward swing signalled worsening economic times ahead According to the National Bureau of Statistics NBS factors responsible for the surge in headline inflation include increase in prices of gas liquid fuel solid fuel garments road transport cleaning repair and hire of clothing Others are air travel meat bread cereals fish potatoes oil fat wine yam and other tubers Ajayi Kadir said that a cursory look at the report revealed that the 18 6 per cent rate portended a gradual journey towards the 18 72 per cent peak inflation rate recorded in January 2017 He said that this worrisome acceleration should be halted given the fact that socio political and economic activities that triggered spike in inflation were imminent Fuel scarcity Naira depreciation and continuous growth in broad money supply in addition to the familiar triggers of inflation spiked the June rate in Nigeria Most notably the price of diesel has spiked by about 230 per cent in the last one year In the midst of rising oil prices the fiscal authority strategically reduced payment from the Federation Account Allocation Committee FAAC in May by about 9 51 per cent representing N62 4 billion reduction which ideally to some extent should have reduced inflationary pressure However the CBN expansionary policy stance which influenced the growth in broad money supply by 25 51 per cent in the last twelve months fueled inflation he said Ajayi Kadir charged government to deploy a bouquet of supply driven policies back with more structural measures to combat the peculiar inflationary pressures from insecurity energy and transport cost to avert the trickle down effects of high inflation He said that government should further reduce the reliance of the country on imported products and raw materials by encouraging local sourcing through a comprehensive and integrated incentivised system MAN DG added that all foreign exchange related challenges confronting the productive sector should be intentionally resolved by making a detour from the CBN s foreign exchange regime that greatly contradicted one of the goals of the National Development Plan There must be sustained efforts at improving infrastructure developments and accelerate the process of ensuring sustainable local refining of petroleum products by reactivating those currently quiescent support the coming on stream of Dangote refinery and issue licences for new refineries The oil and gas industry must be strategically positioned to benefit maximally from future interruptions in global supply that triggers increase in price of crude oil he said NewsSourceCredit NAN
    MPR increase: A journey away from single-digit interest rate – MAN
     The Manufacturers Association of Nigeria MAN has described the decision to increase the Monetary Policy Rate MPR from 13 per cent to 14 as a journey further away from the preferred single digit interest rate regime MAN Director General Mr Segun Ajayi Kadir in a report on Friday in Lagos said the development was not manufacturing friendly considering the myriad of binding constraints already limiting the performance of the sector The News Agency of Nigeria reports that the Monetary Policy Committee MPC of the Central Bank of Nigeria CBN reviewed the MPR upwards by one per cent in response to Nigeria s economic realities The MPC however retained the asymmetric corridor of 100 700 basis points around the MPR Cash Reserve Ratio CRR at 27 per cent and Liquidity Ratio at 30 per cent Ajayi Kadir expressed hope that the stringent conditions for accessing available development funding windows with the CBN would be relaxed to improve the flow of long term loans to the manufacturing sector at single digit interest rate The MAN DG urged the MPC in future adjustments of MPR to take into consideration the trend of core inflation rather than basing decision on headline and food inflation This he said would shield the sector from the backlashes from the 14 per cent MPR ramp up production and guarantee sustained growth in the overall best interest of the economy This is another level of increase in interest rates on loanable funds which will no doubt upscale the intensity of the crowding out effect on the private sector businesses as firms have lesser access to funds in the credit market It will spur upward review of existing lending rates which will drive costs Northward intensify demand crunch increase cost of manufacturing exacerbate the intensity of idle capital assets and reduce capacity utilisation MAN strongly believe that high inflation is a major indication of macroeconomic inadequacies and failure to take steps to address the contributory factors will further limit economic growth and increase the rate of unemployment in the country The MPC must in future adjustments of MPR take into consideration the trend of core inflation rather than basing decision on headline and food inflation he said Addressing the June inflation figure of 18 6 per cent Ajayi Kadir said the rate which had assumed an upward swing signalled worsening economic times ahead According to the National Bureau of Statistics NBS factors responsible for the surge in headline inflation include increase in prices of gas liquid fuel solid fuel garments road transport cleaning repair and hire of clothing Others are air travel meat bread cereals fish potatoes oil fat wine yam and other tubers Ajayi Kadir said that a cursory look at the report revealed that the 18 6 per cent rate portended a gradual journey towards the 18 72 per cent peak inflation rate recorded in January 2017 He said that this worrisome acceleration should be halted given the fact that socio political and economic activities that triggered spike in inflation were imminent Fuel scarcity Naira depreciation and continuous growth in broad money supply in addition to the familiar triggers of inflation spiked the June rate in Nigeria Most notably the price of diesel has spiked by about 230 per cent in the last one year In the midst of rising oil prices the fiscal authority strategically reduced payment from the Federation Account Allocation Committee FAAC in May by about 9 51 per cent representing N62 4 billion reduction which ideally to some extent should have reduced inflationary pressure However the CBN expansionary policy stance which influenced the growth in broad money supply by 25 51 per cent in the last twelve months fueled inflation he said Ajayi Kadir charged government to deploy a bouquet of supply driven policies back with more structural measures to combat the peculiar inflationary pressures from insecurity energy and transport cost to avert the trickle down effects of high inflation He said that government should further reduce the reliance of the country on imported products and raw materials by encouraging local sourcing through a comprehensive and integrated incentivised system MAN DG added that all foreign exchange related challenges confronting the productive sector should be intentionally resolved by making a detour from the CBN s foreign exchange regime that greatly contradicted one of the goals of the National Development Plan There must be sustained efforts at improving infrastructure developments and accelerate the process of ensuring sustainable local refining of petroleum products by reactivating those currently quiescent support the coming on stream of Dangote refinery and issue licences for new refineries The oil and gas industry must be strategically positioned to benefit maximally from future interruptions in global supply that triggers increase in price of crude oil he said NewsSourceCredit NAN
    MPR increase: A journey away from single-digit interest rate – MAN
    Economy3 months ago

    MPR increase: A journey away from single-digit interest rate – MAN

    The Manufacturers Association of Nigeria (MAN) has described the decision to increase the Monetary Policy Rate (MPR) from 13 per cent to 14, as a journey further away from the preferred single-digit interest rate regime.

    MAN Director-General, Mr Segun Ajayi-Kadir, in a report on Friday in Lagos, said the development was not manufacturing friendly, considering the myriad of binding constraints already limiting the performance of the sector. 

    The News Agency of Nigeria reports that the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) reviewed the MPR upwards by one per cent in response to Nigeria’s economic realities.

    The MPC, however, retained the asymmetric corridor of +100-700 basis points around the MPR; Cash Reserve Ratio (CRR) at 27 per cent and Liquidity Ratio at 30 per cent.

    Ajayi-Kadir expressed hope that the stringent conditions for accessing available development funding windows with the CBN would be relaxed to improve the flow of long-term loans to the manufacturing sector at single digit interest rate. 

    The MAN DG urged the MPC, in future adjustments of MPR, to take into consideration the trend of core inflation rather than basing decision on headline and food inflation.

    This, he said, would shield the sector from the backlashes from the 14 per cent MPR, ramp up production and guarantee sustained growth in the overall best interest of the economy.

    “This is another level of increase in interest rates on loanable funds, which will no doubt upscale the intensity of the crowding out effect on the private sector businesses as firms have lesser access to funds in the credit market.

    “It will spur upward review of existing lending rates which will drive costs Northward, intensify demand crunch, increase cost of manufacturing, exacerbate the intensity of idle capital assets, and reduce capacity utilisation.

    “MAN strongly believe that high inflation is a major indication of macroeconomic inadequacies and failure to take steps to address the contributory factors will further limit economic growth and increase the rate of unemployment in the country.

    “The MPC must in future adjustments of MPR, take into consideration the trend of core inflation rather than basing decision on headline and food inflation,” he said.

    Addressing the June inflation figure of 18.6 per cent, Ajayi-Kadir said the rate which had assumed an upward swing, signalled worsening economic times ahead.

    According to the National Bureau of Statistics (NBS), factors responsible for the surge in headline inflation include increase in prices of gas, liquid fuel, solid fuel, garments, road transport, cleaning, repair and hire of clothing.

    Others are air travel, meat, bread, cereals, fish, potatoes, oil, fat, wine, yam and other tubers.

    Ajayi-Kadir said that a cursory look at the report revealed that the 18.6 per cent rate portended a gradual journey towards the 18.72 per cent peak inflation rate recorded in January 2017.

    He said that this worrisome acceleration should be halted, given the fact that socio-political and economic activities that triggered spike in inflation were imminent.

    “Fuel scarcity, Naira depreciation and continuous growth in broad money supply in addition to the familiar triggers of inflation spiked the June rate in Nigeria.

    “Most notably, the price of diesel has spiked by about 230 per cent in the last one year.

    “In the midst of rising oil prices, the fiscal authority strategically reduced payment from the Federation Account Allocation Committee (FAAC) in May by about 9.51 per cent, representing N62.4 billion reduction, which ideally to some extent should have reduced inflationary pressure.

    “However, the CBN expansionary policy stance, which influenced the growth in broad money supply by 25.51 per cent in the last twelve months, fueled inflation,” he said.

    Ajayi-Kadir charged government to deploy a bouquet of supply-driven policies back with more structural measures to combat the peculiar inflationary pressures from insecurity, energy and transport cost to avert the trickle down effects of high inflation.

    He said that government should further reduce the reliance of the country on imported products and raw materials by encouraging local sourcing through a comprehensive and integrated incentivised system.

    MAN DG added that all foreign exchange related challenges confronting the productive sector should be intentionally resolved by making a detour from the CBN’s foreign exchange regime that greatly contradicted one of the goals of the National Development Plan.

    “There must be sustained efforts at improving infrastructure developments and accelerate the process of ensuring sustainable local refining of petroleum products by reactivating those currently quiescent, support the coming on stream of Dangote refinery and issue licences for new refineries.

    “The oil and gas industry must be strategically positioned to benefit maximally from future interruptions in global supply that triggers increase in price of crude oil,” he said.

    NewsSourceCredit: NAN

  •  The Lagos Chamber of Commerce and Industry LCCI has stressed the need for a corresponding boost to supply side factors of inflation to accompany the monetary policy instruments by the Central Bank of Nigeria CBN to tackle inflation Dr Chinyere Almona the Director General LCCI on Wednesday in Lagos gave the advice in reaction to the decisions of the Monetary Policy Committee MPC of the Central Bank of Nigeria CBN The News Agency of Nigeria reports that at the meeting the Monetary Policy Rate MPR was raised from 13 to 14 per cent in response to the surging inflation rate of 18 60 per cent of June The CBN retained the asymmetric corridor of the MPR at 100 700 basis point the Cash Reserve Ratio CRR at 27 5 per cent and liquidity ratio at 30 per cent Almona said that monetary policy instrument such as rate hike alone would not yield the desired result of lowering inflation She said that supply side factors like foreign exchange scarcity insecurity rising costs of fuels and weak infrastructural support for production must be addressed Almona however posited that CBN rate hike was seen to be a necessary option considering that many other economies were raising rates for the same reason of taming inflation According to her a comparatively low interest rate could make the country s portfolio assets less attractive to asset buyers and offshore investors This she said could make the economy suffer from massive capital flight with a negative effect on the exchange rate We note the gloomy outlook of the global economy which has a direct link to our domestic economy with pass through effects of imports The persistent war in Ukraine and other disruptive factors may present as risks into the end of the year Tightening of rates may have been a good decision by the MPC as that was necessary to tame the rising inflation rates in the past months she said Almona urged the CBN to maintain its targeted intervention schemes for agriculture energy infrastructure healthcare exports and Micro Small Medium Enterprises MSME She stressed that development finance loans should be targeted at the MSMEs Beyond the goal of stabilising prices there are other key goals besides this full employment economic growth and balance of payment equilibrium are equally important While it is expedient to curb inflation rates we equally risk a contracted economy that may go toward a recession This calls for the need to embark on targeted financing for critical sectors of the economy to help boost the supply side she said NewsSourceCredit NAN
    LCCI tasks CBN on supply side instruments to tackle inflation
     The Lagos Chamber of Commerce and Industry LCCI has stressed the need for a corresponding boost to supply side factors of inflation to accompany the monetary policy instruments by the Central Bank of Nigeria CBN to tackle inflation Dr Chinyere Almona the Director General LCCI on Wednesday in Lagos gave the advice in reaction to the decisions of the Monetary Policy Committee MPC of the Central Bank of Nigeria CBN The News Agency of Nigeria reports that at the meeting the Monetary Policy Rate MPR was raised from 13 to 14 per cent in response to the surging inflation rate of 18 60 per cent of June The CBN retained the asymmetric corridor of the MPR at 100 700 basis point the Cash Reserve Ratio CRR at 27 5 per cent and liquidity ratio at 30 per cent Almona said that monetary policy instrument such as rate hike alone would not yield the desired result of lowering inflation She said that supply side factors like foreign exchange scarcity insecurity rising costs of fuels and weak infrastructural support for production must be addressed Almona however posited that CBN rate hike was seen to be a necessary option considering that many other economies were raising rates for the same reason of taming inflation According to her a comparatively low interest rate could make the country s portfolio assets less attractive to asset buyers and offshore investors This she said could make the economy suffer from massive capital flight with a negative effect on the exchange rate We note the gloomy outlook of the global economy which has a direct link to our domestic economy with pass through effects of imports The persistent war in Ukraine and other disruptive factors may present as risks into the end of the year Tightening of rates may have been a good decision by the MPC as that was necessary to tame the rising inflation rates in the past months she said Almona urged the CBN to maintain its targeted intervention schemes for agriculture energy infrastructure healthcare exports and Micro Small Medium Enterprises MSME She stressed that development finance loans should be targeted at the MSMEs Beyond the goal of stabilising prices there are other key goals besides this full employment economic growth and balance of payment equilibrium are equally important While it is expedient to curb inflation rates we equally risk a contracted economy that may go toward a recession This calls for the need to embark on targeted financing for critical sectors of the economy to help boost the supply side she said NewsSourceCredit NAN
    LCCI tasks CBN on supply side instruments to tackle inflation
    Economy3 months ago

    LCCI tasks CBN on supply side instruments to tackle inflation

    The Lagos Chamber of Commerce and Industry (LCCI) has stressed the need for a corresponding boost to supply side factors of inflation to accompany the monetary policy instruments by the Central Bank of Nigeria (CBN) to tackle inflation.

    Dr Chinyere Almona, the Director-General, LCCI, on Wednesday, in Lagos, gave the advice in reaction to the decisions of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN).

    The News Agency of Nigeria reports that at the meeting, the Monetary Policy Rate (MPR), was raised from 13 to 14 per cent in response to the surging inflation rate of 18.60 per cent of June.

    The CBN retained the asymmetric corridor of the MPR at +100 -700 basis point, the Cash Reserve Ratio (CRR) at 27.5 per cent and liquidity ratio at 30 per cent.

    Almona said that monetary policy instrument such as rate hike alone would not yield the desired result of lowering inflation.

    She said that supply side factors like foreign exchange scarcity, insecurity, rising costs of fuels and weak infrastructural support for production must be addressed.

    Almona, however, posited that CBN rate hike was seen to be a necessary option considering that many other economies were raising rates for the same reason of taming inflation.

    According to her, a comparatively low interest rate could make the country’s portfolio assets less attractive to asset buyers and offshore investors.

    This, she said, could make the economy suffer from massive capital flight with a negative effect on the exchange rate.

    “We note the gloomy outlook of the global economy which has a direct link to our domestic economy with pass through effects of imports.

    “The persistent war in Ukraine and other disruptive factors may present as risks into the end of the year.

    “Tightening of rates may have been a good decision by the MPC as that was necessary to tame the rising inflation rates in the past months,” she said.

    Almona urged the CBN to maintain its targeted intervention schemes for agriculture, , energy, infrastructure, healthcare, exports, and Micro, Small, Medium Enterprises (MSME).

    She stressed that development finance loans should be targeted at the MSMEs. “Beyond the goal of stabilising prices, there are other key goals besides this; full employment, economic growth, and balance of payment equilibrium are equally important.

    “While it is expedient to curb inflation rates, we equally risk a contracted economy that may go toward  a recession.

    “This calls for the need to embark on targeted financing for critical sectors of the economy to help boost the supply-side,” she said.

    NewsSourceCredit: NAN

  •   Ex ANAN president lists effects of MPR raise Ex ANAN president lists effects of MPR raise Rate By Ige Adekunle Sango Ota Ogun July 19 2022 A financial expert Dr Samuel Nzekwe said that increasing the Monetary Policy Rate MPR from 13 per cent to 14 per cent would increase the cost of borrowing to investors Nzekwe also a former President Association of National Accountants of Nigeria ANAN made this known in an interview with the News Agency of Nigeria on Tuesday in Ota Ogun The Monetary Policy Committee MPC of the Central Bank of Nigeria CBN on Tuesday increased the MPR to 14 per cent from 13 per cent Reading a communiqu after the committee s meeting in Lagos Mr Godwin Emefiele the CBN Governor said the MPC also unanimously agreed to hold all other monetary policy parameters constant The Asymmetric Corridor was thus retained at 100 and 700 basis points around the MPR the Cash Reserved Ratio CRR at 27 5 per cent and the Liquidity Ratio at 30 per cent Emefiele said the parameters were retained to contend the rising trend of inflation in the country This is the second consecutive time the CBN will be raising the MPR this year NAN reports that MPR is the benchmark interest rate in a country or economy on which all other interest rates in that economy are based Nzekwe in his reaction said that the decision of MPC to raise the MPR was to discourage people from borrowing from the financial sector He believes that this is inimical to the productive sector The MPC action by increasing the benchmark interest rate from 13 per cent to 14 per cent is not going to solve much problem rather it would make the cost of funds or borrowing very high In addition it would add to inflationary rates or trend since those investors borrowing for production would add it to the cost of production thus inflation goes higher Some of the Central Bank of Nigeria CBN policies may not work or make much positive impacts because the economy is not producing he said The former ANAN president lamented that internal and external volatility was affecting the economy negatively because of the country s challenge with to production The nation is ready battling with imported inflation due to the goods imported from abroad Nzekwe said He noted that the nation was importing virtually all what was consumed in the country as result of poor conducive environment for productive sector to thrive Nzekwe said that over dependence on imported goods led to scarcity of forex and impacted negatively on the economy He called on the Federal Government to provide enabling environment like stable power supply good road network and adequate security to enable the productive sector to produce sufficient goods and services for the country Nzekwe said that until the nation starts producing goods and services consumed by its people some of the CBN policies might not have as much impact that was needed on the economy NewsSourceCredit NAN
    Ex-ANAN president lists effects of MPR raise
      Ex ANAN president lists effects of MPR raise Ex ANAN president lists effects of MPR raise Rate By Ige Adekunle Sango Ota Ogun July 19 2022 A financial expert Dr Samuel Nzekwe said that increasing the Monetary Policy Rate MPR from 13 per cent to 14 per cent would increase the cost of borrowing to investors Nzekwe also a former President Association of National Accountants of Nigeria ANAN made this known in an interview with the News Agency of Nigeria on Tuesday in Ota Ogun The Monetary Policy Committee MPC of the Central Bank of Nigeria CBN on Tuesday increased the MPR to 14 per cent from 13 per cent Reading a communiqu after the committee s meeting in Lagos Mr Godwin Emefiele the CBN Governor said the MPC also unanimously agreed to hold all other monetary policy parameters constant The Asymmetric Corridor was thus retained at 100 and 700 basis points around the MPR the Cash Reserved Ratio CRR at 27 5 per cent and the Liquidity Ratio at 30 per cent Emefiele said the parameters were retained to contend the rising trend of inflation in the country This is the second consecutive time the CBN will be raising the MPR this year NAN reports that MPR is the benchmark interest rate in a country or economy on which all other interest rates in that economy are based Nzekwe in his reaction said that the decision of MPC to raise the MPR was to discourage people from borrowing from the financial sector He believes that this is inimical to the productive sector The MPC action by increasing the benchmark interest rate from 13 per cent to 14 per cent is not going to solve much problem rather it would make the cost of funds or borrowing very high In addition it would add to inflationary rates or trend since those investors borrowing for production would add it to the cost of production thus inflation goes higher Some of the Central Bank of Nigeria CBN policies may not work or make much positive impacts because the economy is not producing he said The former ANAN president lamented that internal and external volatility was affecting the economy negatively because of the country s challenge with to production The nation is ready battling with imported inflation due to the goods imported from abroad Nzekwe said He noted that the nation was importing virtually all what was consumed in the country as result of poor conducive environment for productive sector to thrive Nzekwe said that over dependence on imported goods led to scarcity of forex and impacted negatively on the economy He called on the Federal Government to provide enabling environment like stable power supply good road network and adequate security to enable the productive sector to produce sufficient goods and services for the country Nzekwe said that until the nation starts producing goods and services consumed by its people some of the CBN policies might not have as much impact that was needed on the economy NewsSourceCredit NAN
    Ex-ANAN president lists effects of MPR raise
    General news3 months ago

    Ex-ANAN president lists effects of MPR raise

    Ex-ANAN president lists effects of MPR raise Ex-ANAN president lists effects of MPR raiseRateBy Ige AdekunleSango-Ota (Ogun), July 19, 2022 A financial expert, Dr Samuel Nzekwe, said that increasing the Monetary Policy Rate (MPR) from 13 per cent to 14 per cent would increase the cost of borrowing to investors.

    Nzekwe, also a former President, Association of National Accountants of Nigeria (ANAN), made this known in an interview with the News Agency of Nigeria on Tuesday in Ota, Ogun.

    The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) on Tuesday increased the MPR to 14 per cent, from 13 per cent.

    Reading a communiqué after the committee’s meeting in Lagos, Mr Godwin Emefiele, the CBN Governor, said the MPC also unanimously agreed to hold all other monetary policy parameters constant.

    The Asymmetric Corridor was thus retained at +100 and -700 basis points around the MPR, the Cash Reserved Ratio (CRR) at 27.5 per cent and the Liquidity Ratio at 30 per cent.

    Emefiele said the parameters were retained to contend the rising trend of inflation in the country.

    This is the second consecutive time the CBN will be raising the MPR this year.

    NAN reports that MPR is the benchmark  interest rate in a country or economy on which all other interest rates in that economy are based.

    Nzekwe, in his reaction, said that the decision of MPC to raise the MPR was to discourage people from borrowing from the financial sector.

    He believes that this is inimical to the productive sector.

    “The MPC action, by increasing the benchmark interest rate from 13 per cent to 14 per cent, is not going to solve much problem; rather, it would make the cost of funds or borrowing very high.

    “In addition, it would add to inflationary rates or trend since those investors borrowing for production would add it to the cost of production, thus inflation goes higher.

    “Some of the Central Bank of Nigeria (CBN) policies may not work or make much positive impacts because the economy is not producing,” he said.

    The former ANAN president lamented that internal and external volatility was affecting the economy negatively because of the  country’s challenge with to production.

    “The nation is ready battling with imported inflation due to the goods imported from abroad,” Nzekwe said.

    He noted that the nation was importing virtually all what was consumed in the country as result of poor conducive environment for productive sector to thrive.

    Nzekwe said that over-dependence on imported goods led to scarcity of forex and impacted negatively on the economy.

    He called on the Federal Government to provide enabling environment like stable power supply, good road network and adequate security to enable the productive sector to produce sufficient goods and services for the country.

    Nzekwe said that until the nation starts producing goods and services consumed by its people, some of the CBN policies might not have as much impact that was needed on the economy.

    NewsSourceCredit: NAN

  •   CBN increases benchmark interest rate to 14 MPC By Lydia Ngwakwe Lagos July 19 2022 The Monetary Policy Committee MPC of the Central Bank of Nigeria CBN on Tuesday increased the Monetary Policy Rate MPR to 14 per cent from its initial 13 per cent Reading a communiqu after the committee s meeting in Lagos Mr Godwin Emefiele the CBN Governor said the MPC also unanimously agreed to hold all other monetary policy parameters constant The Asymmetric Corridor was thus retained at 100 and 700 basis points around the MPR the Cash Reserved Ratio CRR at 27 5 per cent and the Liquidity Ratio at 30 per cent Emefiele said the parameters were retained to contend the rising trend of inflation in the country MPC noted with concern the continued aggressive movement in inflation even after the rate hike at its last meeting and expressed its unrelenting resolve to restore prices stability while providing the necessary support to strengthen our fragile economy As regards the decision as to whether to tighten loosen or hold members were unanimous and so did not consider both loosening and retaining rates at the existing levels at this meeting This is because loosening will worsen the existing liquidity condition in the economy and further dampen money market rates necessary to stimulate savings and investment Members also felt that loosening will trigger the weakening of the exchange rate which could pass through to domestic prices MPC did not also consider holding rates constant because a hold stance will suggest that the bank is not responding sufficiently to both the global and domestic price developments as inflation numbers continue to trend aggressively upwards And as regards tightening policy stance members were unanimous that given the aggressive increase in inflation coupled with the resultant negative consequences particularly on purchasing power of the poor as well as retarded growth there is the need to continue to tighten he said Emefiele however said that the policy dilemma was hinged around the level of tightening needed for inflation without dampening manufacturing output which could result from the higher cost of borrowing The CBN governor also said that aside narrowing the negative real interest rates down members were also of the view that tightening would signal a strong determination of the bank This he said would also help to aggressively address its price stability mandate and portray the MPC sensitivity to the impact of inflation on the vulnerable households and the need to improve their disposable income Furthermore Emefiele said that members noted that the last 150 basis points hike by the committee in May had not permeated enough in the economy to halt the rising trend in inflation He noted that the month on month percentage current increase in headline inflation rose sharply in June 2022 compared with May 2022 The committee also noted that other complimentary administrative measures deployed by the bank to address the growth in money supply did not moderate inflationary trend Addressing a balance of policy objectives and development in the global and domestic environment the committee resolved that the most rational policy option will be to further strengthen its tightening stance in order to effectively curtail the unabated rising trend of inflation Members were conscious of the fact that output growth remained fragile However not contending inflation now could erode the moderate gains achieved in improving consumer purchasing power and thus worsen poverty levels of the vulnerable populace To ensure that output still remains in focus MPC advised the banks manager to continue to use the development finance tools to support the Agricultural and Manufacturing sectors in Nigeria NewsSourceCredit NAN
    CBN increases benchmark interest rate to 14%
      CBN increases benchmark interest rate to 14 MPC By Lydia Ngwakwe Lagos July 19 2022 The Monetary Policy Committee MPC of the Central Bank of Nigeria CBN on Tuesday increased the Monetary Policy Rate MPR to 14 per cent from its initial 13 per cent Reading a communiqu after the committee s meeting in Lagos Mr Godwin Emefiele the CBN Governor said the MPC also unanimously agreed to hold all other monetary policy parameters constant The Asymmetric Corridor was thus retained at 100 and 700 basis points around the MPR the Cash Reserved Ratio CRR at 27 5 per cent and the Liquidity Ratio at 30 per cent Emefiele said the parameters were retained to contend the rising trend of inflation in the country MPC noted with concern the continued aggressive movement in inflation even after the rate hike at its last meeting and expressed its unrelenting resolve to restore prices stability while providing the necessary support to strengthen our fragile economy As regards the decision as to whether to tighten loosen or hold members were unanimous and so did not consider both loosening and retaining rates at the existing levels at this meeting This is because loosening will worsen the existing liquidity condition in the economy and further dampen money market rates necessary to stimulate savings and investment Members also felt that loosening will trigger the weakening of the exchange rate which could pass through to domestic prices MPC did not also consider holding rates constant because a hold stance will suggest that the bank is not responding sufficiently to both the global and domestic price developments as inflation numbers continue to trend aggressively upwards And as regards tightening policy stance members were unanimous that given the aggressive increase in inflation coupled with the resultant negative consequences particularly on purchasing power of the poor as well as retarded growth there is the need to continue to tighten he said Emefiele however said that the policy dilemma was hinged around the level of tightening needed for inflation without dampening manufacturing output which could result from the higher cost of borrowing The CBN governor also said that aside narrowing the negative real interest rates down members were also of the view that tightening would signal a strong determination of the bank This he said would also help to aggressively address its price stability mandate and portray the MPC sensitivity to the impact of inflation on the vulnerable households and the need to improve their disposable income Furthermore Emefiele said that members noted that the last 150 basis points hike by the committee in May had not permeated enough in the economy to halt the rising trend in inflation He noted that the month on month percentage current increase in headline inflation rose sharply in June 2022 compared with May 2022 The committee also noted that other complimentary administrative measures deployed by the bank to address the growth in money supply did not moderate inflationary trend Addressing a balance of policy objectives and development in the global and domestic environment the committee resolved that the most rational policy option will be to further strengthen its tightening stance in order to effectively curtail the unabated rising trend of inflation Members were conscious of the fact that output growth remained fragile However not contending inflation now could erode the moderate gains achieved in improving consumer purchasing power and thus worsen poverty levels of the vulnerable populace To ensure that output still remains in focus MPC advised the banks manager to continue to use the development finance tools to support the Agricultural and Manufacturing sectors in Nigeria NewsSourceCredit NAN
    CBN increases benchmark interest rate to 14%
    Economy3 months ago

    CBN increases benchmark interest rate to 14%

    CBN increases benchmark interest rate to 14%   MPC By Lydia Ngwakwe Lagos, July 19, 2022 The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) on Tuesday increased the Monetary Policy Rate (MPR) to 14 per cent from its initial 13 per cent.

    Reading a communiqué after the committee’s meeting in Lagos, Mr Godwin Emefiele, the CBN Governor, said the MPC also unanimously agreed to hold all other monetary policy parameters constant.

    The Asymmetric Corridor was thus retained at +100 and -700 basis points around the MPR, the Cash Reserved Ratio (CRR) at 27.5 per cent and the Liquidity Ratio at 30 per cent.

    Emefiele said the parameters were retained to contend the rising trend of inflation in the country.

    “MPC noted with concern the continued aggressive movement in inflation even after the rate hike at its last meeting and expressed its unrelenting resolve to restore prices stability, while providing the necessary support to strengthen our fragile economy.

    “As regards the decision as to whether to tighten, loosen or hold, members were unanimous and so did not consider both loosening and retaining rates at the existing levels at this meeting.

    “This is because loosening will worsen the existing liquidity condition in the economy and further dampen money market rates necessary to stimulate savings and investment.

    “Members also felt that loosening will trigger the weakening of the exchange rate which could pass through to domestic prices.

    “MPC did not also consider holding rates constant because a hold stance will suggest that the bank is not responding sufficiently to both the global and domestic price developments as inflation numbers continue to trend aggressively upwards.

    “And as regards tightening policy stance, members were unanimous that given the aggressive increase in inflation, coupled with the resultant negative consequences, particularly on purchasing power of the poor as well as retarded growth, there is the need to continue to tighten,’’he said.

    Emefiele, however, said that the policy dilemma was hinged around the level of tightening needed for inflation without dampening manufacturing output which could result from the higher cost of borrowing.

    The CBN governor also said that aside narrowing the negative real interest rates down, members were also of the view that tightening would signal a strong determination of the bank.

    This, he said would also help to aggressively address its price stability mandate and portray the MPC sensitivity to the impact of inflation on the vulnerable households and the need to improve their disposable income.

    Furthermore, Emefiele said that members noted that the last 150 basis points hike by the committee in May had not permeated enough in the economy to halt the rising trend in inflation.

    He noted that the month-on-month percentage current increase in headline inflation rose sharply in June 2022, compared with May 2022.

    The committee also noted that other complimentary administrative measures deployed by the bank to address the growth in money supply did not moderate inflationary trend.

    “Addressing a balance of policy objectives and development in the global and domestic environment, the committee resolved that the most rational policy option will be to further strengthen its tightening stance in order to effectively curtail the unabated rising trend of inflation.

    “Members were conscious of the fact that output growth remained fragile.

    “However, not contending inflation now could erode the moderate gains achieved in improving consumer purchasing power and thus worsen poverty levels of the vulnerable populace.

    “To ensure that output still remains in focus, MPC advised the banks manager to continue to use the development finance tools to support the Agricultural and Manufacturing sectors in Nigeria.

    (

    NewsSourceCredit: NAN

  •  A Financial Expert Okechukwu Unegbu has urged the Central Bank of Nigeria CBN to ensure a complete review in all the rates in Monetary Policy Rates Unegbu gave the advice ahead of the CBN two day Monetary Policy Committee MPC meeting for July on Monday The News Agency of Nigeria reports that the apex bank and increased the Monetary Policy Rate MPR from 11 5 to 13 per cent in the last MPC meeting in May the first change after over two years It however held all other parameters constant Unegbu said that heightening inflation and other economic challenges required the CBN to take all encompassing look at the rates to meet with global economic trend Meanwhile analysts from Afrinvest Limited projected that the MPC would maintain the MPR at its July meeting According to the analysts the increase in the MPR in May failed to have an immediate impact on inflation due to weak and delayed transmission mechanism of monetary policy We believe the MPC will retain status quo on MPR Our hold steady outlook is premised on the expectation that the committee will prefer to give more time to assess the impact of the last policy change they said According to analysts from Cowry Assets Management Limited global macro economic stability is now under threat from inflation Thus the policy changes in responding to it will have substantial repercussions across emerging and frontier markets economies However we see the acceleration in the inflation numbers in June offering policy makers limited room to maneuver rates Thus we project the July inflation to further accelerate to 18 90 per cent they said IAA NewsSourceCredit NAN
    Expert suggests change in rates as CBN holds 2-day MPC meeting
     A Financial Expert Okechukwu Unegbu has urged the Central Bank of Nigeria CBN to ensure a complete review in all the rates in Monetary Policy Rates Unegbu gave the advice ahead of the CBN two day Monetary Policy Committee MPC meeting for July on Monday The News Agency of Nigeria reports that the apex bank and increased the Monetary Policy Rate MPR from 11 5 to 13 per cent in the last MPC meeting in May the first change after over two years It however held all other parameters constant Unegbu said that heightening inflation and other economic challenges required the CBN to take all encompassing look at the rates to meet with global economic trend Meanwhile analysts from Afrinvest Limited projected that the MPC would maintain the MPR at its July meeting According to the analysts the increase in the MPR in May failed to have an immediate impact on inflation due to weak and delayed transmission mechanism of monetary policy We believe the MPC will retain status quo on MPR Our hold steady outlook is premised on the expectation that the committee will prefer to give more time to assess the impact of the last policy change they said According to analysts from Cowry Assets Management Limited global macro economic stability is now under threat from inflation Thus the policy changes in responding to it will have substantial repercussions across emerging and frontier markets economies However we see the acceleration in the inflation numbers in June offering policy makers limited room to maneuver rates Thus we project the July inflation to further accelerate to 18 90 per cent they said IAA NewsSourceCredit NAN
    Expert suggests change in rates as CBN holds 2-day MPC meeting
    Economy3 months ago

    Expert suggests change in rates as CBN holds 2-day MPC meeting

    A Financial Expert, Okechukwu Unegbu, has urged the Central Bank of Nigeria (CBN) to ensure a complete review in all the rates in Monetary Policy Rates .

    Unegbu gave the advice ahead of the CBN two-day Monetary Policy Committee (MPC) meeting for July on Monday.

    The News Agency of Nigeria reports that the apex bank and increased the Monetary Policy Rate (MPR) from 11.5 to 13 per cent in the last MPC meeting in May, the first change after over two years.

    It, however, held all other parameters constant.

    Unegbu said that heightening inflation and other economic challenges required the CBN to take all-encompassing look at the rates to meet with global economic trend.

    Meanwhile, analysts from Afrinvest Limited projected that the MPC would maintain the MPR at its July meeting.

    According to the analysts, the increase in the MPR in May failed to have an immediate impact on inflation due to weak and delayed transmission mechanism of monetary policy.

    “We believe the MPC will retain status-quo on MPR.

    “Our hold-steady outlook is premised on the expectation that the committee will prefer to give more time to assess the impact of the last policy change,” they said.

    According to analysts from Cowry Assets Management Limited, global macro-economic stability is now under threat from inflation.

    “Thus the policy changes in responding to it will have substantial repercussions across emerging and frontier markets economies.

    “”However , we see the acceleration in the inflation numbers in June offering policy makers limited room to maneuver rates.

    “Thus, we project the July inflation to further accelerate to 18.90 per cent, ” they said.

    IAA

    NewsSourceCredit: NAN

  •  Some economists have suggested diverse ways in which the Federal Government can overcome the rising food prices in the country They made the suggestions in separate interviews with the News Agency of Nigeria on Monday in Lagos Food inflation rate in Nigeria rose month on month MoM to 2 0 per cent in April from 1 62 per cent in January according to the data from Nigeria Bureau of Statistics Prof Ndubisi Nwokoma Director Centre for Economic Policy Analysis and Research CEPAR University of Lagos urged government to put a squeeze on credit to the economy by raising rates Nwokeoma said that credit squeeze would lead to a tight monetary policy stance He noted that could be achieved by increasing the MPR and making credit availability less easy According to him this discourages inflation growth and depreciation of the naira One of the factors driving inflation is the depreciating value of the naira vis a vis other foreign currencies that is the exchange rate This can be curtailed by putting a squeeze on credit to the economy by raising rates High cost of foreign exchange enhances cost push inflation Second the level of uncertainty in the economy hampers production of goods and services This is fueled by insecurity and election year effects said Nwokoma Also Sheriffdeen Tella Professor of Economics at the Olabisi Onabanjo University Ago Ago Iwoye Ogun advised government to review the macroeconomic policies to promote the economic growth through domestic production According to him the current inflation is bad policies induced From the monetary policy side the financing of budget deficits particularly financing subsidies by the central bank through printing of money while from the fiscal side is rising cost of diesel electricity and rising consumption taxes These affect cost of production reduction in demand and output Reduced output means high unit cost which is passed on to selling price Government has to review the macroeconomic policies to promote economic growth through domestic production he said On his part Akpan Ekpo Professor of Economics and Public Policy at the University of Uyo Akwa Ibom said there was the need to take advantage of the war between Russia and Ukraine and encourage farmers to produce grains going forward The present surge in prices is due to many factors farmers are unable to farm because of insecurity supply chain constraints government borrowing through ways and means Distortion in the foreign exchange market imported inflation because of the Russian Ukraine war fiscal rascality of government among others Inflation adversely affects the poor and pensioners since they cannot draw on savings to survive Government should do its utmost best to solve the insecurity so that farmers can produce optimally palliatives should be given to the poor including retirees who are merely above the poverty line he said Ekpo said While I support a managed exchange rate regime the gap between the official and black market rates should be marginal to curtail inflationary pass through NewsSourceCredit NAN
    Economists proffer solutions to rising food prices 
     Some economists have suggested diverse ways in which the Federal Government can overcome the rising food prices in the country They made the suggestions in separate interviews with the News Agency of Nigeria on Monday in Lagos Food inflation rate in Nigeria rose month on month MoM to 2 0 per cent in April from 1 62 per cent in January according to the data from Nigeria Bureau of Statistics Prof Ndubisi Nwokoma Director Centre for Economic Policy Analysis and Research CEPAR University of Lagos urged government to put a squeeze on credit to the economy by raising rates Nwokeoma said that credit squeeze would lead to a tight monetary policy stance He noted that could be achieved by increasing the MPR and making credit availability less easy According to him this discourages inflation growth and depreciation of the naira One of the factors driving inflation is the depreciating value of the naira vis a vis other foreign currencies that is the exchange rate This can be curtailed by putting a squeeze on credit to the economy by raising rates High cost of foreign exchange enhances cost push inflation Second the level of uncertainty in the economy hampers production of goods and services This is fueled by insecurity and election year effects said Nwokoma Also Sheriffdeen Tella Professor of Economics at the Olabisi Onabanjo University Ago Ago Iwoye Ogun advised government to review the macroeconomic policies to promote the economic growth through domestic production According to him the current inflation is bad policies induced From the monetary policy side the financing of budget deficits particularly financing subsidies by the central bank through printing of money while from the fiscal side is rising cost of diesel electricity and rising consumption taxes These affect cost of production reduction in demand and output Reduced output means high unit cost which is passed on to selling price Government has to review the macroeconomic policies to promote economic growth through domestic production he said On his part Akpan Ekpo Professor of Economics and Public Policy at the University of Uyo Akwa Ibom said there was the need to take advantage of the war between Russia and Ukraine and encourage farmers to produce grains going forward The present surge in prices is due to many factors farmers are unable to farm because of insecurity supply chain constraints government borrowing through ways and means Distortion in the foreign exchange market imported inflation because of the Russian Ukraine war fiscal rascality of government among others Inflation adversely affects the poor and pensioners since they cannot draw on savings to survive Government should do its utmost best to solve the insecurity so that farmers can produce optimally palliatives should be given to the poor including retirees who are merely above the poverty line he said Ekpo said While I support a managed exchange rate regime the gap between the official and black market rates should be marginal to curtail inflationary pass through NewsSourceCredit NAN
    Economists proffer solutions to rising food prices 
    Economy3 months ago

    Economists proffer solutions to rising food prices 

    Some economists have suggested diverse ways in which the Federal Government can overcome the rising food prices in the country.They made the suggestions in separate interviews with the News Agency of Nigeria on Monday in Lagos.Food inflation rate in Nigeria  rose, month-on-month (MoM) to 2.0 per cent in April, from 1.62 per cent in January, according to the data from Nigeria Bureau of Statistics.Prof. Ndubisi Nwokoma, Director, Centre for Economic Policy Analysis and Research (CEPAR), University of Lagos, urged government to put a squeeze on credit to the economy by raising rates.Nwokeoma said that credit squeeze would lead to a tight monetary policy stance.He noted that could be achieved by increasing the MPR and making credit availability less easy.According to him, this discourages inflation growth and depreciation of the naira.“One of the factors driving inflation is the depreciating value of the naira vis-a-vis other foreign currencies; that is the exchange rate.“This can be curtailed by putting a squeeze on credit to the economy by raising rates.  High cost of foreign exchange enhances cost push inflation.“Second,  the level of uncertainty in the economy hampers production of goods and services.  This is fueled by insecurity and election year effects, ” said  Nwokoma.Also, Sheriffdeen Tella,  Professor of Economics at the Olabisi Onabanjo University, Ago-Ago-Iwoye, Ogun, advised  government to review the macroeconomic policies to promote the economic growth through domestic production.According to him, the current inflation is bad policies induced.“From the monetary policy side, the financing of budget deficits, particularly financing subsidies by the central bank through printing of money, while from the fiscal side is rising cost of diesel, electricity and rising consumption taxes.“These affect cost of production, reduction in demand and output. Reduced output means high unit cost which is passed on to selling price.“Government has to review the macroeconomic policies to promote economic growth through domestic production,” he said.On his part, Akpan Ekpo, Professor of Economics and Public Policy at the University of Uyo, Akwa Ibom, said there was the need to take advantage of the war between Russia and Ukraine and encourage farmers to produce grains going forward.“The present surge in prices is due to many factors: farmers are unable to farm because of insecurity; supply chain constraints, government borrowing through ways and means.“Distortion in the foreign exchange market, imported inflation because of the Russian-Ukraine war, fiscal rascality of government, among others.“Inflation adversely affects the poor and pensioners since they cannot draw on savings to survive.“Government should do its utmost best to solve the insecurity so that farmers can produce optimally; palliatives should be given to the poor including retirees who are merely above the poverty line,” he said.Ekpo said, “While I support a managed exchange rate regime, the gap between the official and black market rates should be marginal to curtail inflationary pass through.”

    NewsSourceCredit: NAN