“IT is gratifying to note the shift in policy focus by the Central Bank of Nigeria from stability to growth. This is the appropriate policy choice at this time.”
That’s how Muda Yusuf, Director – General, the Lagos Chamber of Commerce and Industry (LCCI), reacted to the apex bank’s reduction of the Monetary Policy Rate (MPR) by 50 basis points from 14% to 13.5 %.
“This is in consonance with the clamour by the private sector for a relaxation of the tight monetary policy regime in the light of weak consumer demand, fragile economic growth and high rate of unemployment,” he said.
LCCI acknowledges that this reduction is not materially significant, but it has a symbolic and signalling value.
“The reality is that the economy is currently characterized by fragile growth at 2.3%; unemployment at 23.1% and youth unemployment at 36.5%; high dependence on crude oil export; weak diversification and high poverty incidence.
“The economy needs both monetary and fiscal stimulus at a time like this.
“Although, the major monetary policy instruments – CRR and Liquidity Ratio – are still high at 22.5% and 30% respectively, are still high and in tightening mode, the reduction in the MPR has a symbolic and signaling significance.
“We expect that other monetary instruments will be adjusted over time,” said the DG.