Why Manufacturers Want CBN To Reduce Interest Rate Now
The monetary policy committee of the Central Bank of Nigeria, CBN decided on Tuesday to retain interest rates at 14%.
This makes it 2 years since the MPC has kept the interest rate at 14%.
But this doesn’t sit quite well with many people, especially Nigerian manufacturers who have been expecting a slight reduction in the interest rate.
The manufacturers, under the aegis of Manufacturers Association of Nigeria, MAN, has therefore asked the CBN to reduce the MPR from 14 per to boost lending to the real sector.
The MAN President, Dr Frank Jacobs, who made the call in an interview with newsmen on Wednesday in Lagos, said the reduction would show CBN’s sincerity and seriousness in boosting lending.
Jacobs was obviously reacting to the decision of the MPC to retain the MPR at 14%, to combat inflation due to foreseen increase in government spending ahead of the 2019 elections.
The CBN governor, Godwin Emefiele, had during the meeting said that the MPC was concerned with the decreased number of loans given out by Deposit Money Banks (DMBs) to the real sectors of the economy.
To this end, he said that the bank would continue to churn out policies aimed at encouraging banks to increase the flow of credit to the real sector to consolidate economic recovery.
He said that CBN would implement a framework that would incentivise the banks to increase lending to the manufacturing and agricultural sectors, through a differentiated dynamic cash reserve requirement regime.