ABUCCIMA Hails Monetary Policy Instrumens Retention

The Abuja Chamber of Commerce and Industry, Mines and Agriculture (ABUCCIMA) says it agrees with the decision of the Monetary Policy Committee (MPC) to retain all monetary policy instruments.
The President, ABUCCIMA, Mr Tony Ejinkeonye, said this in an interview with newsmen in Abuja, yesterday.
The MPC had unanimously voted to retain Monetary Policy Rate (MPR) at 14 per cent, Cash Reserve Ratio at 22.5 per cent and Liquidity Ratio at 30 per cent.
Also, the asymmetric corridor was retained at +200 and -500 basis points around the MPR.
This signifies no major monetary policy change since July, 2016.
Ejinkeonye said that inflation, which currently stood at about 18.55 per cent and has been running at double digits for almost a year, poses a challenge to the economy.
“The purpose of monetary policy is to control the supply of money, often targeting an inflation rate or interest rate to ensure price stability and general trust in the currency.
“A reduction in the interest rate at this time will no doubt compound the current economic woes.
“This is because it will push credit to the private sector at lower rate and make it impossible for government to borrow and spend.
“Therefore, the decision by CBN at the last MPC meeting to maintain the status quo, in my opinion, is a good decision,’’ he said.
The ABUCCIMA president commended the CBN’s stance to focus on tackling inflation and encourage local manufacturers.