CBN Plans To Increase Interest Rate Soon
In January 2018, the Central Bank of Nigeria actually planned to cut interest rates around this time.
But that seems to be off the table now, as indications have emerged that the apex bank, may in fact, increase the rate soon.
It is gathered that the CBN hopes to tighten the monetary policy in response to higher inflation ahead of the general elections in February.
A Bloomberg report on Tuesday quoted a CBN Deputy Governor, Dr Joseph Nnanna, as giving the indication on Monday on the sidelines of a conference in Egypt.
Already, he said virtually all members of the Monetary Policy Committee had supported the idea, that “the Monetary Policy Rate should increase if inflationary pressures build up.”
But finance and economic experts have expressed divergent views on the issue with those opposed to the idea saying increasing the MPR would make it difficult for businesses to raise funds.
According to the report, the MPC has held its key rate at a record 14% since 2016 in a bid to prop up the naira and tame inflation after it spiked to double digits in the same year.
While price growth has since slowed to below the monetary policy rate, the panel has shifted from some members voting for rate cuts in January to three of 10 members favouring higher rates at the July meeting.
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