The Central Bank of Nigeria has hinted about plans to increase the interest rate as it 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 the resort city of Sharm El-Sheikh 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 per cent 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. The CBN Governor, Godwin Emefiele, flagged the delayed passage of the 2018 budget of N9.12tn ($25bn) and pre-election spending as possible price risks in the second half of the year.
(Punch)
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