Experts want MPC to reduce MPR
Financial experts in the country are expecting the Central Bank of Nigeria’s Monetary Policy Committee to reduce the Monetary Policy Rate (MPR) as the committee will meets on Monday and Tuesday to deliberate on developments in the economy.
Business 247 News Online notes that the bi-monthly meeting will likely see the 11-member MPC take some key economic decisions that may affect the nation’s macro-economic indicators which are expected to influence the direction of the economy.
According to a notice posted on CBN website, the 253rd meeting of the MPC would hold by 10am on Monday and Tuesday at the CBN corporate headquarters in Abuja
It is also learnt that top on the agenda of the meeting is the need to tackle the biting recession occasioned by slow growth in the economy, rising inflation and the volatility in the foreign exchange market.
Economic experts expect the MPC to begin an expansionary monetary policy by reducing the MPR. They also expect the members to take decisions that will affect the exchange rate.
“Economic recovery should be the focus of the MPC now. They should focus on pumping more liquidity into the system rather than taking it out. Inflation is currently at 18.3 per cent but it is not caused by excess liquidity in the system, it is cost push. It is time for us to address economic recovery. We need to learn from what the Bank of England did last month to address inflation,” the Chief Executive Officer, Cowry Asset Management Limited, Mr. Johnson Chukwu, said.
Similarly, an economic analyst at EY, Mr. Bisi Sanda, said the MPC needed to address the challenge of exchange rate volatility.
He said, “The committee must address the problem of exchange rate. The CBN Governor, Mr. Godwin Emefiele, said the CBN has been given $11 billion annually to Bureau De Change (BDC) operators since 2011. That is $55 billionn in five years. We need to ask ourselves whether the BDC operators are critical stakeholders in our exchange rate management. It is not like that in other climes.
“They need to look at how banks are committing infractions in the forex market and see how to impose sanctions. Steps must be taken to address the problems causing volatility in the exchange rate. In the past, some people were banned for life from the forex market. What are we doing now?”
