Central Bank of Nigeria Urged to Pause Interest Rate Hikes Amid Inflation Moderation
In a move that could impact Nigeria’s economic growth, financial experts and analysts have advised the Central Bank of Nigeria’s Monetary Policy Committee (MPC) to pause interest rate hikes ahead of its upcoming meeting. Prof Uche Uwaleke, Director at the Institute of Capital Market Studies, Nasarawa State University, Keffi, and Prof Anthony Kila, a political economist, made this call in separate interviews with NAN on Saturday.
According to Uwaleke, given the country’s inflation rate, which has moderated for two consecutive months to 32.15 percent, the MPC should take a complete break from interest rate hikes, which currently stand at 26.75 percent. He emphasized that a rate hike is negatively impacting Nigeria’s economic growth, particularly the employment growth rate.
"The adverse impact of high interest rates on economic growth and employment is becoming evident, especially in an economy grappling with stagflation," Uwaleke said. He added that pausing rate hikes would allow the economy to recover and create a more favorable environment for growth.
Kila, on the other hand, suggested that the CBN must review its approach to inflation and economic growth to reflect the realities of the Nigerian economy. He believes that for the MPC’s decision to have a direct impact on the economy, the CBN must rethink its methodology for measuring inflation and economic growth.
"For the MPC to truly matter, the CBN must review its approach to measuring inflation and economic growth to better reflect Nigerians’ realities," Kila said.
The CBN has scheduled its 297th MPC meeting for Monday and Tuesday, and the outcome of the meeting will be closely watched by economists and investors alike.
