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ProfRem
Guest
The Central Bank of Nigeria governor, Godwin Emefiele, on Saturday, hinted at a probable increase in lending rates sequel to the unrelenting headwinds that keep pushing up the nation’s inflation rate.
Emefiele, who spoke with journalists on the sidelines of the ongoing World Bank/IMF Spring Meetings in Washington DC, United States, said having the inflation rate higher than the Monetary Policy Rate (MPR), which is the benchmark lending rate, was not an acceptable model.
The CBN governor said: “Truly, Nigerians expect that if they want to access fund, they should do so at a low interest rate but, of course, you will agree with me that with the increase in inflation rate from about 11.3 per cent that it was in February to almost about 12.4 per cent in March, naturally what you find is that interest rate will still have to go up sort of because having the MPR below the inflation rate is not a model that is acceptable. Interest rate has to be higher than inflation rate. So, that is what we expect.”
He, however, added that in spite of the hostile domestic and global fiscal headwinds, the apex bank would continue to do everything reasonable to stimulate broad-based growth of the economy through innovative monetary policy measures.
Emefiele, who spoke with journalists on the sidelines of the ongoing World Bank/IMF Spring Meetings in Washington DC, United States, said having the inflation rate higher than the Monetary Policy Rate (MPR), which is the benchmark lending rate, was not an acceptable model.
The CBN governor said: “Truly, Nigerians expect that if they want to access fund, they should do so at a low interest rate but, of course, you will agree with me that with the increase in inflation rate from about 11.3 per cent that it was in February to almost about 12.4 per cent in March, naturally what you find is that interest rate will still have to go up sort of because having the MPR below the inflation rate is not a model that is acceptable. Interest rate has to be higher than inflation rate. So, that is what we expect.”
He, however, added that in spite of the hostile domestic and global fiscal headwinds, the apex bank would continue to do everything reasonable to stimulate broad-based growth of the economy through innovative monetary policy measures.
