Nigeria: Benchmark Rate – CBN Urged to Curb Inflation, Naira Depreciation

The MPC meeting is scheduled for Monday and Tuesday.

A financial expert, Okechukwu Unegbu, has urged the Central Bank of Nigeria (CBN’s) Monetary Policy Committee to focus on policy decisions that would curb rising inflation and stabilise the Naira.

Mr Unegbu, who is a past president of the Chartered Institute of Bankers of Nigeria (CIBN), gave the advice on Sundays in an interview with the News Agency of Nigeria (NAN) in Abuja.

The expert spoke against the backdrop of the forthcoming MPC meeting scheduled for Monday and Tuesday.

He said the depreciation of the Naira had become inexplicable considering certain indices that were supposed to strengthen and stabilise the currency.

“The MPC should do a comparative analysis to know the effect of their parameters on the economy, having retained the same parameters for about six times now.

“Inflation rate is still high; interest rate keeps fluctuating. The foreign exchange market is the worst.

“One dollar is almost equivalent to N500, but when you have N500 in Nigeria you can still afford a decent meal of rice, beans and even beef.

“But in the United States one dollar cannot get you anything. It is a bit of an enigma,” he said.

Mr Unegbu urged the MPC to take urgent and practical steps to strengthen and stabilise the Naira.

He added that with the recent surge in the international price of crude oil and inflow of huge diaspora remittances into the economy, the Naira ought to be more stable.

He urged the committee to also consider the rising case of unemployment and come up with policy decisions to curb it.

“The MPC should consider the effect of the surge in the price of crude oil and diaspora remittances on the economy.

“Members should also consider the level of unemployment because they are supposed to manage the economy by advising government,” he said.

NAN reports that, in its last meeting in May, the MPC retained the Monetary Policy Rate (MPR) for the fifth consecutive time, at 11.5 per cent, while all other parameters were also retained.

The asymmetric corridor was retained at +100/-700 basis points around the MPR; Cash Reserve Ratio (CRR) at 27.5 per cent and Liquidity Ratio at 30 per cent.(NAN)

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