Ahead of Monday’s Monetary Policy Committee, MPC, Meeting of the Central Bank of Nigeria, financial analysts have called for a pause in the hike of the country’s interest rate.
The Central Bank Bank of Nigeria has first fixed its 296th MPC meeting for the 21st and 22nd of July amid the continued surge in the country’s inflation rate which stood at 34.19 per cent in June, 2024.
Speaking on the possible outcome of the meeting, Chief Executive Officer of the Promotion of Private Enterprise, Mude Yusuf said the MPC may continue to increase the country’s interest rate which stood at 26.25 per cent in May.
According to him, the decision to hike interest rates will be in tandem with the continued rise in inflation.
However, he said monetary instruments have been overstretched and suggested a pause on interest rate hikes.
He said, “Inflation is still going up. They may continue to increase interest rates but that is not what the economy needs at this time.
“For me, they should pause and allow the fiscal policies that have been announced to play out and let’s see the impact it will make.
“I think we have overstretched monetary instruments because of inflation. They should put a pause on interest rate hikes.”
On his part, Prof Uche Uwaleke, Special Adviser to the chairman of the Senate Committee on Banking, Insurance, and Other Financial Institutions, said that there is a need for a pause in interest rate hikes given the fact that the coming harvest season would likely moderate inflationary pressure.
“If I were a member of the MPC, I would vote for a hold position given the fact that the harvest season will most probably moderate the inflationary pressure which is more evident in the food index”, he said.
Recall inflation data released recently by the National Bureau of Statistics showed that headline and food inflation rose for the 18th time to 34.19 per cent and 40.87 per cent in June.
MPC meeting: Financial analysts call for pause in Nigeria’s interest rate hike
