MPC: Expert criticises MPC’s retention of monetary policy

By Lucy Nwachukwu
Abuja –  An economist, Prof. Uche Uwaleke, has condemned the decision by the Monetary Policy Committee (MPC) in the country to retain existing monetary interest rates in spite of present condition of the economy.
Uwaleke, who is the Head of Banking and Finance Department, Nassarawa State University, told the News Agency of Nigeria (NAN) on Wednesday in Abuja that the resolution was anti-economic development.
According to him, the unanimous decision by MPC members to retain the monetary tightening stance seemed that the Central Bank of Nigeria (CBN) is opposed to tackling inflationary pressure and exchange rate volatility.
He said the decision was at the expense of helping to take the economy out of recession, adding that it was taken in spite of calls by well-informed Nigerians for a gradual shift to “an accommodative policy’’.
“It is more disturbing when one notes the seeming contradiction in government’s desires to spend.
“This is judging from the fiscal stimulus packages in the 2016 budget, and the apex bank’s inclination to squeeze an economy already bleeding in all sectors.
“That the MPC chose to tow a path different from that of the government exemplified by the Finance Minister’s preference for reduced policy rates is testimony to the fact.

“The fact which is that monetary and fiscal policies in Nigeria are not on the same page, and the earlier the two are harmonised, the better for the economy,’’ Uwaleke said.

He said that the MPC would have reduced the Monetary Policy Rate (MPR) to bring down the cost of capital for business.

“ Business growth will help the economy out of recession.

“And, I consider economic downturn a bigger challenge than inflation and exchange rate stability which seem to be primary concern of CBN,’’ he said.

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