Pol Eco Analytics, a Nigeria-based independent think tank and research organisation, has called on the Central Bank of Nigeria to rethink its monetary policy over the years favouring increasing interest rate as a measure to fight inflation in the economy.
While Pol Eco Analytics acknowledged the fact that interest rate is one out of other monetary instruments available to cushion inflation, it noted that this monetary instruments has, however, now become the only weapon CBN deploys in the name of fighting inflation.
This was contained in a statement by its Senior Researcher, Adefolarin A. Olamilekan.
According to the statement, “For the record, since middle of last year 2022, CBN in it usual characteristics after its ritual Monetary Policy Committee (MPC) meeting that takes place every quarter, consider hiking interest rate.
“For instance, between January to July, the apex bank has consistently raised the rate,16.50%,17.50% 18.50% and 18.75.
“Sadly, this monetary stance of the CBN in its best is only good on paper fighting inflation.
Meanwhile the reality before Nigeria is soaring inflation even before the removal of fuel subsidy.
“For us an organization and a stakeholder in the Nigerian economy and development project, we believe the CBN means well for Nigerians, but its policy on the other hand are contradictory to bettering the welfare of the people, particularly in closing the gap in our micro and macroeconomic situation, either to further boost employment, alleviate poverty and re- engineer investment.”
Pol Eco Analytics emphasised the need for the reserve bank of the nation to see reasons to retool its monetary policy as a measure to improve fiscal and trade policy that would give opportunity for sound credit and not to hinder growth through credit facilities.
“Pol Eco Analytics therefore calls on the current manager of the CBN to think locally on the current prevailing situation, and not to be swayed by what developed nations’ reserve banks are doing.
“In the same vein, Pol Eco Analytics urges the Acting CBN governor to demonstrate transparency in deals, appropriately.”
