By Akin Akinremi
The Central Bank of Nigeria’s Monetary Policy Committee should reduce the MPR at their meeting, which will commence from Monday next week. This is the view of some experts and analysts who spoke ahead of the meeting.
The experts’s expectations is that the bi-monthly meeting will likely see the 11-member MPC take some key economic decisions that may affect the nation’s macro-economic indicators which are expected to influence the direction of the economy.
Some of the experts who spoke with WESTERN POST said since the CBN had tried all it could to bring down inflation rate and make Forex available to reduce the over-bloated rates by the end users, it is high time the apex regulatory body towed the line of these experts and bring down the MPR.
The official exchange rate of Naira to Dollar as at the time of filling this report stood at N359 while at the BDC and parallel markets, one dollar went for N490. Pounds stood at N532 while Euro was sold early on Friday at N500 to N1.
It is also learnt that top on the agenda of the MPC meeting is the need to tackle the biting recession occasioned by slow growth in the economy, rising inflation and the volatility in the foreign exchange market.
The meeting will start on Monday through Tuesday at the CBN Office in Abuja.
Economic experts expect the MPC to begin an expansionary monetary policy by reducing the MPR. They also expect the MPC members to take decisions that will affect the exchange rate.
“Economic recovery should be the focus of the MPC now. They should focus on pumping more liquidity into the system rather than taking it out. Inflation is currently at 18.3 per cent but it is not caused by excess liquidity in the system, it is cost pushed. It is time for us to address economic recovery. We need to learn from what the Bank of England did last month to address inflation,” the Chief Executive Officer, Cowry Asset Management Limited, Mr. Johnson Chukwu, said.
Similarly, an economic analyst from Deep Trust Investment Ltd, Oladapo Adenle, said the MPC needed to address the challenge of exchange rate volatility.
He said, “The committee must address the problem of exchange rate. The CBN Governor, Mr. Godwin Emefiele, said the CBN has been given $11 billion annually to Bureau De Change (BDC) operators since 2011. That is $55 billion in five years. We need to ask ourselves whether the BDC operators are critical stakeholders in our exchange rate management. It is not like that in other climes.
“They need to look at how banks are committing infractions in the Forex market and see how to impose sanctions. Steps must be taken to address the problems causing volatility in the exchange rate. In the past, some people were banned for life from the Forex market when caught round tripping, but nowadays we have not seen that happen. “Where are we heading to now”.