Nigeria CBN hikes interest rate

[Nairaland]

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The Centre for the Promotion of Private Enterprise, CPPE, has tackled the Central Bank of Nigeria?s fifth interest rate hike amid economic hardship.

The Executive Director of CPPE, Muda Yusuf, made this known in a statement on Tuesday in reaction to the CBN Monetary Policy Committee?s latest interest rate hike.

This comes as the CBN 297th MPC meeting on Tuesday announced a fresh rate increase by 50 basis points to 27.25 percent in September 2024.


Reacting to a rate hike, CPPE said CBN?s decision to continue tightening is at variance with the mood of most economic players and the desire to promote economic recovery.

According to him, what investors and manufacturers need is some oxygen and stimulus, not policy measures that would worsen an already suffocating situation.

?MPR at 27.25%; CRR at 50% and asymmetric corridor at +500 and -100 are very difficult monetary conditions to bear for most businesses, given the prevailing macroeconomic and structural conditions.

?The second quarter GDP numbers showed clearly that the economy was still in a floundering mode as many critical sectors of the economy slowed. These include manufacturing and other subsectors of the industrial sector such as cement, food and beverage, chemicals and pharmaceuticals, trade, ICT and real estate. The road transport, motor assembly, publishing and motion pictures sectors contracted during the quarter.

?The aviation, refining, textile, livestock and quarry and minerals sector were still in recession. Tightening financial conditions in the circumstances does not seem appropriate.

?The private sector should not be made to pay the price of liquidity growth which they were not responsible for. Issues of excess liquidity should be addressed within a causative context. The injection of liquidity into the system is largely public-sector driven, as rightly noted by the CBN Governor. Therefore, the focus of resolving it should be within that context. Stifling the financial conditions to address liquidity issues is detrimental to the investment and growth of the economy.