Wednesday, July 8, 2026

Economists kick against interest rate hike

The Monetary Policy Committee had raised the MPR from 17.5 per cent to 18 per cent at its last meeting in March.

• May 26, 2023
Godwin Emefiele
Godwin Emefiele

Some economists have urged the Central Bank of Nigeria (CBN) to focus more on supply side or cost push factors and structural issues fueling inflation in the country.

On Friday in Lagos that the repeated interest rate hikes had done little to stop the upward trend in inflation.

The apex bank on May 24, raised the Monetary Policy Rate (MPR) for the seventh time to 18.5 per cent from 18 per cent.

The MPR is the baseline interest rate in an economy, on which every other interest rate used within an economy is built.

The Monetary Policy Committee had raised the MPR from 17.5 per cent to 18 per cent at its last meeting in March.

The members voted to retain the Asymmetric Corridor of +100/-700 basis points around the MPR, retain the Cash Reserve Ratio (CRR) of 32.5 per cent and retain the Liquidity Ratio of 30 per cent.

Professor Ndubisi Nwokoma, Director, Centre for Economic Policy Analysis and Research, University of Lagos, advised CBN to focus its attention on the cost push factors as they drive inflation.

“On the increase in the MPR, I think the CBN is still battling with the inflation issue, which is proper.

“The CBN should focus more on the cost push factors of inflation, like the  increased costs of production due to supply chain disruptions, exchange rate instability as well as increased price expectations due to the country’s fiscal challenges,” he said.

Mr Nwokoma, however, said the apex bank needed to also know that the negative consequences of its naira redesign and cashless policies were still affecting the inflation rate as  they had not significantly moderated since cash became more available after the crisis earlier in the year.

Also, Uchenna Uwaleke, a Professor of Finance and Capital market at Nasarawa State University, Keffi, said that the hike in MPR to 18.5 per cent was not in the interest of output growth.

According to him, the repeated rate hike has further stifled access to credit for micro small and medium-sized enterprises.

“Besides, it may do little to halt the upward trend in inflation as recent experience has shown.

“Any significant moderation in inflation rate can only come from dealing with supply side factors and structural issues fueling rising prices such as insecurity, electricity and fuel challenges,” he said.

(NAN)

We have recently deactivated our website's comment provider in favour of other channels of distribution and commentary. We encourage you to join the conversation on our stories via our Facebook, Twitter and other social media pages.

More from Peoples Gazette

farmers

Agriculture

FG tasks ECOWAS on leveraging financing strategies for agroecology

The federal government has urged stakeholders in the agriculture and finance sectors in the West Africa region to leverage financing strategies to enhance agroecology practices

Katsina State

Politics

Katsina youths pledge to deliver over 2 million votes to Atiku

“Katsina State is Atiku’s political base because it is his second home.”

Oladipupo Adebutu

Politics

2027: Ogun West indigenes endorse Adebutu for Ogun governorship

Mr Adebutu said he was humbled by the display of love from the true indigenes of Yewa land.

King's College

Education

Senior civil servants caution against privatising unity schools

Mr Fajobi said the union would reject attempts to cede the 120 federal government colleges to private individuals or groups, including old students’ associations.

Atiku, Seyi Makinde and Peter Obi

Politics

2027: Set aside ego, back Makinde for president, APM guber candidate tells Obi, Atiku

Mr Makinde, the governor of Oyo State, had declared his intention to run for the presidency under the APM.

Delta Governor, RT. Hon Sheriff Oborevwori [Photo: Facebook/ Sheriff]

States

Delta governor donates five operational vehicles to correctional service

‎The governor urged the state controller of corrections to maintain the vehicles properly and deploy them for official use.

International Monetary Fund (IMF)

NationWide

IMF projects 3.0% global growth in 2026, 4.1% for Nigeria

The report noted that oil-importing and non-resource-intensive economies would be more adversely affected by higher energy and food prices.

Embraer E175 aircraft

NationWide

Air Peace expands routes with Embraer E175

The disclosure was made in a statement by the airline’s spokesperson, Efe Osifo-Whiskey, on Wednesday in Lagos.