Uche Uwaleke, a professor of finance and capital market at Nasarawa State University, Keffi has reacted to the Central Bank of Nigeria (CBN) hike of the Monetary Policy Rate (MPR) to 18 percent, saying the apex bank was still concerned about rising inflation.
According to him, “It’s apparent the MPC is still concerned about rising inflation and the pressure in the forex market against the backdrop of its primary mandate of maintaining price stability.
“However, I had expected MPC to maintain a hold position considering the significant drop in currency in circulation occasioned by the currency redesign policy and the fact inflation rate actually decelerated month on month between January and February 2023. The adverse impact of the recent cash scarcity on productive activities as well as the conclusion of election season should have provided justification for a hold position.
“That said, i think that the iincrease in the MPR by 50 basis points is a signal to financial markets that the CBN has begun the process of rate-hike pause and I expect that a complete halt in policy tightening will most likely happen at the next scheduled meeting of MPC in May.
“This is necessary in order to stimulate economic activities and create job opportunities”.
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