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CPPE has urged the Central Bank of Nigeria (CBN) to reduce interest rates going forward.
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This comes after the CBN retained the Monetary Policy Rate (MPR) at 27.50 percent, a decision that CPPE says aligns with their expectations and those of investors.
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CPPE’s Chief Executive Officer, Muda Yusuf, expressed concerns about the Cash Reserve Ratio (CRR) being too high at 50 percent and the asymmetric corridor being too wide.
The Centre for the Promotion of Private Enterprise (CPPE) has urged the Central Bank of Nigeria (CBN) to reduce interest rates going forward.
This comes after the CBN retained the Monetary Policy Rate (MPR) at 27.50 percent, a decision that CPPE says aligns with their expectations and those of investors.
According to Muda Yusuf, the Chief Executive Officer of CPPE, “This is within the context of the fact that, given the recently rebased inflation rate computation, we have seen a decline in inflation to 24.48 percent, which is currently less than the monetary policy rate.”
Yusuf noted that retaining the rates makes sense to avoid exacerbating pressure on businesses and citizens with exposure to banks.
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However, Yusuf expressed concerns about the Cash Reserve Ratio (CRR) being too high at 50 percent, stating, “I don’t think we should continue on that trajectory.
There is no justification for it. Our economic or macroeconomic situation is not so dire as to warrant such an outrageous level of CRR.”
He also observed that the asymmetric corridor of +500/-100 basis points is too wide, saying, “If the MPR is already at 27.5, an asymmetric corridor at +500 basis points is not healthy. ”
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