Lagos – Prof. Sheriffadeen Tella, a university lecturer, on Wednesday called for drastic reduction in the lending rates of commercial banks.
Tella of the Department of Economics, Olabisi Onabanjo University, Ago Iwoye, Ogun, made the call in an interview with the News Agency of Nigeria (NAN) in Lagos.
Tella said for now the banks were at the mercy of borrowers because of the forces of demand and supply.
He said the lending rates were still high because more borrowers thronged the banks daily for loans.
“If the MPR is reduced and nobody comes to borrow money, then the bank will have no option than to reduce their lending rates.
“Since the demand for bank facilities are on the increase, the banks will leverage on it to continue to increase their rates,’’ Tella said.
Meanwhile, the CBN had said it was beyond its mandate to interfere in the unstable lending rates charged by commercial banks.
“Banks are in business to make money. We cannot force them to fix interest rate at particular levels.
“What we can do is to continue to put in place policies that would encourage them to introduce projects that would target the lending to the real sector and the small and medium enterprises, SMEs,” the CBN said.
On devaluation, Tella commended the CBN for its refusal to bow to analysts calling for the devaluation of the naira.
According to the don, if there is free fall and the CBN further devalue the naira, it will result to a further free fall at the parallel market.
He said that this would not augur well for the economy.
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NAN reports that the 105 Edition of the Monetary Policy Committee (MPC) meeting of the CBN had maintained the MPR and the CRR at 11 and 20 per cent, respectively.
Prior to the meeting, economic experts had expected the apex bank to come up with policies that would lead to naira devaluation and a more flexible foreign exchange regime. (NAN)