MPC’s decision on rate retention will boost economy – Expert

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A financial expert, Dr Boniface Chizea, says the retention of the Monetary Policy Rates (MPR) would help boost banks’ ability to increase credit to real sector of the economy.

Chizea, an economist said in Lagos that the decision reached by the Monetary Policy Committee(MPC) of the Central Bank of Nigeria (CBN) was expected.

According to him, the retention of the rates showed the concentration of the CBN on its development functions in the economy.

He said the MPR retention would equally help to boost economic activities and increase productivity in the country.

Chizea, also the Chief Executive Officer, BIC Consultancy Services, noted that the boost could be sustained through the CBN’s continuous efforts in giving out funds to the target sectors of the economy.

He said, although, there were speculations that there might be downward review in MPR, Cash Reserve Ratio and Liquidity Ratio because of the decline in the inflation rate.

The financial expert, however, said the MPC decision was not surprising based on the fact that the rates were downwardly reviewed to 13.5 per cent in March after being on 14 per cent since July 2016.

The analysts at Afrinvest had on Monday said they expected the CBN MPC to keep the rates at current levels inspite of the tone of members to support monetary easing.

“We expect rates to be kept at current levels.”

“Based on our analysis of recent issues, we believe the MPC will maintain status quo on all policy rates in the next meeting, – (MPR) at 13.5 per cent.

“The Cash Reserve Ratio (CRR) at 22.5 per cent, Liquidity Ratio at 30 per cent and asymmetric corridor at +200 and -500bps around the MPR,”  the Afrinvest team said.

Suzan O