Economist Advises MPC To Relax Monetary Policy

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An economist, Prof. Sheriffdeen Tella has advised the Monetary Policy Committee (MPC) of Central Bank of Nigeria (CBN) to relax the monetary policy by lowering bank lending rate in 2018.
Tella, a Professor of Economics, Olabisi Onabanjo University, Ago-Iwoye, Ogun State, gave the advice in an interview with newsmen in Lagos.
He said that a downward review of the Monetary Policy Rate (MPC) was imperative to make borrowing cheaper for the manufacturing sector.
The MPC is the rate at the CBN lends to banks, it is the nominal anchor of bank lending rates.
Tella said the country had in the last two years witnessed restrictive or contractionary monetary policy, but needed to relax the rates now.
He said lower bank lending rates would boost investments in long-term financial instruments as well as the capital market.
Tella said the apex bank should expect increased spending this year, being an election year, stressing that politicians would keep the economy awash with money, especially those kept outside the banking system.
He said that politicians might not borrow to finance the election, but dig into their home vaults.
According to him, such money cannot be controlled by the CBN and would be spent towards the 2019 elections.