Accountant Urges MPC To Reduce Interest Rate Further

A former President of the Association of National Accountants of Nigeria (ANAN), Dr Samuel Nzekwe, has advised the Monetary Policy Committee (MPC) to further cut the interest rate to attract new investors into the economy.

Nzekwe, who gave the advice in an interview with the News Agency of Nigeria  in Ota, Ogun, on Sunday, applauded the MPC’s decision in cutting the interest rate by 50 basis points.

The MPC action has led to a continued decline in the country’s inflation rate.

The former ANAN president said that a higher interest rate simply means that the interest rate on loans charged by banks would also be high.

According to Nzekwe, conversely, when interest rates are high, fewer investors will want to borrow at those rates.

“I want to appeal to the MPC to further consider cutting the interest rate further because this would bring down banks’ interest rates charged on loans.

“The implication of this is that more investors would be willing to borrow money from the banks to do business, thus creating more business activities, which translates to the creation of job opportunities,” he said.

Nzekwe also urged the federal government to look inward by creating an enabling environment for the manufacturing sector to produce more goods and services to reduce the country’s heavy dependence on imports.

The MPC, at its 304th meeting held between Feb. 23 and Feb. 24 in Abuja, cut the MPR by 50 basis points, bringing it to 26.50 per cent.

The committee also adjusted the asymmetric corridor to +50/-450 basis points around the MPR, retained the Cash Reserve Ratio (CRR) for Deposit Money Banks at 45 per cent and for Merchant Banks at 16 per cent, and maintained the Liquidity Ratio at 30 per cent.