Following the ongoing Monetary Meeting Policy of the Central Bank of Nigeria, a financial expert has advised the apex bank not to raise interest rates in order to avert a recession.
Dr Basil Chukwu, a senior lecturer at the Department of Economics and Development Studies at Alex Ekwueme Federal University in Ndufu-Alike, Ebonyi State, revealed this to DAILY POST on Monday.
He was speaking in opposition to the CBN’s MPC, which was slated for Monday and Tuesday.
According to News360 Info, the MPC raised the country’s interest rate from 18% to 18.50% in May. In order to combat growing inflation, a comparable increase has been consistent throughout the last six months.
Chukwu noted that amid the harsh economic realities, the country’s highest monetary decision-making committee should retain or reduce its interest rate to stimulate supply.
He said further tightening of the economy could lead to recession.
“The Central Bank of Nigeria, CBN should either maintain the last rate or reduce it to stimulate the economy’s supply side. The removal of oil subsidies in the last two months has created significant negative economic shocks, especially in food prices, transport and energy sectors. Further tightening of the economy to halt rising prices (inflation) will depress aggregate demand and could lead to a deeper recession/depression. The reduction in the MPC rate will stimulate production, forcing down prices of goods and services”, he stated.
