The Centre for the Promotion of Private Enterprise, CPPE, has commended the Central Bank of Nigeria, CBN, for a moderate interest rate hike.It also called for urgent implementation of fiscal policies to stabilise the economy.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.
The meeting started Monday, July 22, and ended Tuesday, July 23, in Abuja.The apex bank had increased the Monetary Policy Rate, MPR, to 26.75 per cent from 26.25 per cent to address the surging inflation in the country.
Nigeria’s inflation rate recently climbed to 34.19 per cent, 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.
Mr Yusuf said the moderate increase was tolerable and showed that the CBN was listening and responding to the suggestions of financial stakeholders to stop aggressive tightening measures
He explained that, although he preferred a pause on rate increases because of the challenges businesses were facing.“The marginal increase marks a softening of the tightening stance. It is tolerable,” Yusuf said.The CPPE boss, however, called for speedy implementation of fiscal policy measures to tackle inflation.
“Already, the economic stabilisation plan contains some laudable fiscal policy measures that could reduce production costs in the economy.“It is also important and urgent for the government to adopt and quickly implement the recommendation of the Presidential Committee on Fiscal and Tax Reforms on the Customs duty exchange rate, which proposed N800 per dollar.“The adoption of this recommendation would have a considerable impact on the cost of goods and services in the country,” he said.
