Reactions continue to trail the decision of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) to leave its key policy rates unchanged.
In a chat with Blueprint on Tuesday in Abuja, Capital Market Professor at Nasarawa State University, Uche Uwaleke said the country’s elevated inflation played a key role in the MPC decision.
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria has retained the monetary policy rate at 12.5 per cent, leaving the CRR at 27.5 percent and the liquidity ratio at 30 per cent. While the Asymmetric Corridor was retained at +200/-500 basis points.
Uwaleke noted that the *MPC held the policy parameters as expected in view of elevated inflation and mounting pressure in the forex market.
“In order to discourage DMBs from parking money at the CBN, the MPC should consider (at its next meeting) widening the asymmetric corridor around the MPR from +2/-5 to +2/-7. By doing so, the Standing Deposit Facility drops from 7.5% to 5.5% thereby compelling DMBs to on-lend the funds to the real sector,” the former Imo State finance Commissioner added.
