The Director of the Centre for the Promotion of Private Enterprise, Muda Yusuf, said that investors are the casualties of the Central Bank’s continued Monetary Policy Rate hikes.
He disclosed this in a statement on Tuesday while reacting to the apex bank’s interest rate increase to 18 per cent from 17.5 per cent in the prior month.
The former director of the Lagos State Chamber of Commerce and Industry stated that the interest rate increment means an additional burden to investors in Nigeria.
According to him, the Governor of CBN would have shown empathy for the trauma inflicted on Nigerians by cash scarcity instead of hiking MPR.
“The victims of the continuous hike in the monetary policy rate are the investors in the real economy and other entrepreneurs in the economy. An increase of the MPR to 18% means an additional burden on business as it will result in a spike in the cost of credit. Production costs would increase, sales would drop, profit margins would shrink, and investors’ confidence would be negatively impacted.
“The reality is that financing, high energy cost, and foreign exchange challenges are much bigger factors in the inflation equation.
“The CBN should pay greater attention to financial system stability at this time. Recent developments in the global financial system underscore the imperative of cautious interest rate hikes.
The CPPE is concerned about the stifling effect of the high CRR of 32.5% on the banking system stability and financial intermediation role of the banking system.
“It is regrettable that the CBN governor did not acknowledge the pains and sufferings that ordinary citizens have been going through because of the cash crisis. The CBN Governor should have shown some empathy and apologise to Nigerians for the trauma inflicted by the cash crisis”.
On Monday, Media Talk Africa reported that CBN raised MPR to 18 per cent from 17.5 per cent, an outcome of its two-day Monetary Policy Committee meeting in Abuja.
