Financial experts on Thursday expressed optimism that the Monetary Policy Committee (MPC) would review the interest rate at its subsequent meetings when the 2018 budget would have been passed.
The experts said this in Lagos while reacting to the outcome of the first MPC meeting for the year.
They emphasized that the Monetary Policy Rate (MPR) review would be expected after the passage of the budget.
Mazi Okechukwu Unegbu, former President, Chartered Institute of Bankers of Nigeria (CIBN), said that the MPC would tinker with the rate when the budget would have been approved.
Unegbu said that the members had no choice but to retain the rates the way they were at the moment because the budget was still pending as well as other economic factors.
He said that the capital market had been experiencing a mixed performance, while the interest rate for manufacturing companies had skyrocketed.
Malam Garba Kurfi, the Managing Director, APT Securities and Funds Ltd. expressed dissatisfaction with the MPC decision to keep Nigerians in suspense as to when the rates would be reviewed.
Kurfi said that the members would have done better by setting a limit to when Nigerians should expect a change in the benchmark interest rate.
He said that the committee would have set an inflation rate target when the interest rate review would be expected rather than allow people to guess.
According to him, banks keep their money in Treasury Bills (TBs) and Federal Government Bonds rather than lend to the real sector to accelerate economic growth.
“As of today, most banks lend to companies between 22 per cent and 30 per cent which is higher than the apex bank approved limit,’’ Kurfi said.
Mr. Godwin Emefiele, Central Bank of Nigeria (CBN) Governor, said at the end of meeting that the committee was keeping monetary policy rates because of the fear that loosening the rates may lead to a rise in consumer prices.