Expert says retention of MPR at 13.5% by CBN expected

Mr Tope Fasua, an Economic Expert, says retention of Monetary Policy Rate (MPR) at 13.5 per cent by the Central Bank of Nigeria (CBN) was expected.

Fasua said this while reacting to the outcome of Monetary Policy Committee (MPC) meeting in Abuja on Tuesday.

The News Agency of Nigeria (NAN) reports that the committee retained MPR at 13.5 per cent also Cash Reserve Ratio (CRR) at 22.5 per cent as well as Liquidity Ratio at 30 per cent.

But reacting to the development, the expert said he expected the MPC to actually leave it at 13.5 per cent and watch the impact on the economy before reviewing it if need be.

He said that the reduction of MPR did not have any effect on the lending rates by banks as it was perceived by some people.

He added that there were other issues banks considered before reducing their lending rates not on reduction of MPR.

Fasua said the continued effort by CBN to encourage banks to lend money to Small and Medium Enterprises (SMEs) was commendable.

According to him, before now, banks usually give huge loans to its friends leaving out the sectors that need it most.

On the continued intervention in the Foreign Exchange Market by CBN, Fasua said it was a welcome development and the right step in the right direction.

He added that no country in the world allowed it currency to float without intervening like the apex bank was doing.

-NAN