MPC: Don expects rates retention over weak economic recovery

Date:

Lagos, March 18, 2021 Prof. Uche Uwaleke has expressed optimism of rates retention at the 278th meeting of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN).

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Uwaleke, a Professor of Finance and Capital Market at the Nasarawa State University, disclosed this in an interview with newsmen on Tuesday in Lagos.

He spoke on his expectations ahead of the 278th meeting of the MPC scheduled to hold on March 22 and March 23 in Abuja.

Uwaleke projected that the MPC would hold the rates in March in spite of rising inflation due to weak economic recovery which stood at 0.11 per cent in the fourth quarter.

“I expect the MPC to hold the rates in March. Yes, inflation rate is rising but economic recovery is still weak at 0.11 per cent in previous quarter.

“Also, inflationary pressure is more from cost push factors.

“I expect that the MPC will advise the CBN to continue to use development finance initiatives through increased interventions to support economic recovery especially via stimulation of agricultural output to stem rising inflation,” he said.

Uwaleke, also the President, Association of Capital Market Academics of Nigeria, said that the economy was battling with cost push inflation emanating from high transport and energy costs, insecurity and high exchange rate.

He noted that insecurity aggregates the situation via food supply shortages.
Uwaleke said that monetary and fiscal policies should synchronise to address these challenges, including ramping up agricultural output.

Speaking on high unemployment rate in the country at 33 per cent, he suggested that it was time to declare a state of emergency in the nation’s education sector.

“The solution in my view is functional education. Our youths require skills and the conducive environment to harness them,” he said.

Recall that the MPC members, at its 277th meeting in January, the first in 2021, voted unanimously to retain the Monetary Policy Rate (MPR) at 11.5 per cent.

Mr Godwin Emefiele, Governor of the CBN, while reading the communiqué from the meeting, said the MPC also agreed to retain Cash Reserve Ratio (CRR) at 27.50 per cent, Liquidity Ratio at 30 per cent and the Assymetric Window at plus 100 and minus 700 basis points around the MPR.

The CBN governor had said the committee was confronted with policy choices, either to aggressively reverse inflationary pressure in the country or support measures aimed at enhancing growth and reversing the current economic recession.

“MPC agreed to reverse the inflationary trend and pursue price stability in the growing economy. MPC opined that an aggressive expansionary measure may worsen inflation and result to negative consequences on the exchange rates.
“On this basis, MPC agreed to hold all basic parameters constant.

“MPC was of the view that the CBN should pursue its strategy of systematic synchronisation of monetary and fiscal policy accommodation through its development finance initiatives aimed at mitigating the impact of the COVID-19 pandemic on Nigerians,’’ he had said.

Godwin Okafor
Godwin Okaforhttps://naija247news.com
Godwin Okafor is a veteran Financial Journalist, Internet Social Entrepreneur, and the visionary Founder of Naija247news Media Limited. With an extensive career spanning over 16 years in financial journalism, Godwin possesses a wealth of experience that seamlessly bridges both traditional and digital media landscapes. His journey in journalism commenced at Business Day, Nigeria, where he laid the foundation for his prolific career. In 2010, Godwin took a bold step by founding Naija247news Media, a platform that has since become a prominent player in delivering timely and accurate news. Educationally, Godwin Okafor holds a Bachelor's degree in Industrial Relations and Personnel Management from the prestigious Lagos State University, Ojo, Lagos. His commitment to continuous learning led him to the Lagos Business School, where he further honed his skills. Additionally, he is recognized as a Fellow of the University of Pennsylvania, having successfully completed the Wharton Seminar for Business Journalists. Throughout his illustrious career, Godwin has earned acclaim by winning numerous journalism awards, a testament to his dedication to excellence in reporting. Beyond his role as a Financial Journalist, Godwin Okafor wears the hat of the Chairman at Emmerich Resources Limited, the publishing entity behind Naija247news. His visionary leadership has played a pivotal role in shaping the media landscape and establishing Naija247news as a trusted source of information. Godwin Okafor's multifaceted expertise, commitment to journalistic integrity, and leadership in the realm of business journalism underscore his influential presence in both the media and entrepreneurial spheres.

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