The Lagos Chamber of Commerce and Industry LCCI) on Thursday advised the Central Bank of Nigeria (CBN to prioritize achieving low interest rate over maintaining high monetary policy rate (MPR) in its monetary policy measures targeted at stimulating economic growth in the country.
The Chamber hinged its stance on the fact that doing so would stimulate investment and enhance broad based economic growth.
The President of the organized private sector group, Mr. Babatunde Ruwase, who made this position known during a press conference on the state of the economy in Lagos, said that low interest rate had the potential of creating jobs, boosting industrial output and moderating effect on inflation.
He pointed out that the decision of CBN’s Monetary Policy Committee (MPC) at its last meeting concluded on 24th July, which retained the Monetary Policy Rate (MPR) at 14 percent and left other rates unchanged was underpinned by CBN’s concern about inflation and the risks to exchange rate, foreign reserves and capital flows.
The industrialist however maintained that at times like these, the prioritization of stimulation of investment and growth, which entails giving priorities to job creation and poverty reduction, should be prioritized by the regulatory monetary authority amongst other considerations.
The LCCI President commended the apex bank on the creation of a single digit interest rate window through the issuance of Commercial Papers by the large corporates, especially for the real sector.
According to him, the monetary policy measure offers long term facility of up to seven years tenure, describing it as desirable for businesses to grow.
Ruwase also lauded the Monetary Policy Committee’s (MPC’s) decision to introduce a differentiated dynamic cash reserves requirements (CRR) regime to direct long-term bank credit at 9 percent with a minimum tenure of seven years and two years moratorium to employment elastic sectors of the economy.
He noted that the proposed monetary policy measure would enable banks that offer credit to sectors that readily create jobs enjoy CRR concession.