Ex-CBN director lauds MPC over interest rate reduction
A financial expert, Dr Titus Okunrounmu, has commended the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) for reducing the interest rate by one-percentage-point from 13.5 per cent.
Okunrounmu, a former Director, Budgetary Department at CBN, made the commendation in an interview with the News Agency of Nigeria (NAN) in Ota, Ogun, on Friday.
According to him, the downward review of interest rate to 12.5 per cent by the Apex bank will encourage private investment to boost the nation’s economy.
He said that the apex bank was trying to induce those who are critically in need of loan facilities, to come and invest.
He said that the CBN decision to reduce the interest rate was an attempt to further encourage people to take credit and loans as the nation’s economic activities had slowed under the lockdown situation.
“With COVID-19 pandemic associated with lockdown, no investor will be willing to invest money in the country until the environment is conducive for investment,’’ Okunrounmu said.
He noted that productivity and investment would be higher with a lower interest rate rather than the higher interest rate, thus making the economy to grow faster.
Okunrounmu, however, said that with more investment, industry and agricultural sectors among others would further ease while the unemployment rate will reduce.
NAN reports that Mr Godwin Emefiele, CBN Governor, had on Thursday announced a reduction in the interest rate from 13.5 per cent to 12.5 per cent.
Cash Reserve Ratio (CRR) and Liquidity Rate were retained at 27.5 per cent and 30 per cent respectively after the apex bank’s MPC meeting in Abuja.