Central Bank of Nigeria Commends Moderate Interest Rate Hike
The Centre for the Promotion of Private Enterprise (CPPE) has commended the Central Bank of Nigeria (CBN) for its moderate interest rate hike. The CBN raised the Monetary Policy Rate (MPR) to 26.75% from 26.25% to address the surging inflation in the country.
Nigeria’s inflation rate recently climbed to 34.19%, driven by rising food prices. The committee raised the rate by 50 basis points and adjusted the asymmetric corridor to +500 and -100 basis points around the MPR.
Dr. Muda Yusuf, Chief Executive Officer of CPPE, made the call in a statement on Tuesday while responding to the outcome of the Monetary Policy Committee (MPC) meeting of the CBN. He praised the moderate increase, saying it marked a softening of the tightening stance and was tolerable.
However, Yusuf emphasized the need for urgent implementation of fiscal policies to stabilize the economy. He noted that the economic stabilisation plan contains some laudable fiscal policy measures that could reduce production costs in the economy.
The CPPE boss also called for the adoption and quick implementation of the recommendation of the Presidential Committee on Fiscal and Tax Reforms on the Customs duty exchange rate, which proposed N800 per dollar. He said the adoption of this recommendation would have a considerable impact on the cost of goods and services in the country.
The MPC meeting, which started on Monday, July 22, and ended on Tuesday, July 23, in Abuja, had discussed measures to address the challenges faced by the economy, including inflation and business challenges. The CBN’s decision to increase the interest rate is aimed at tackling inflation and stabilizing the economy.
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