Monetary Committee to retain interest rates

Mr Johnson Chukwu, the Managing Director of Cowry Asset Mangement, says Monetary Policy Committee (MPC) may retain the interest rate at its next meeting.
He said this may be as a result in the increase recorded in the December headline inflation rate.
Chukwu said in Lagos that the retention was necessary because of the slow pace in the economic growth.
“I do not think the MPC can afford to increase any of the benchmark rates despite the uptick in inflation.
“The simple reason is that the economic growth is still very sluggish. We are living in an economy with the growth at 1.81 per cent whereas the population is growing at three per cent.
Accoding to him, any increase in interest rate can put pressure on economic growth rate and slow it down below the present obtained.
Chukwu said that the current inflation was already abysmal.
“For the fact that the economic growth rate is still sluggish, we are having unemployment rate that is at 21 per cent.
“The MPC will not take any measure that will worsen the economic growth rate standing at 1.81 per cent.
“The most likely outcome of their next meeting will be to keep the benchmark rate at the current level.
Also Mr Titus Okurounmu, former Director, Statistics Department of the Central Bank of Nigeria (CBN) said, in taking their decision at the MPC meeting, focus would be on working toward ensuring alignment in the fiscal and monetary policies.
Okunrounmu said that would help in boosting efforts toward the direction of the economy in the year.
He also said that anything different from the current position was not expected as the election period drew nearer.
At the end of the November meeting, the MPC maintained all its policy rates, retaining the Monetary Policy Rate (MPR) at 14 per cent, with the asymmetric corridor at +200 and -500 basis points around the MPR.
It retained the Cash Reserve Ratio (CRR) and Liquidity Ratio, LR, at 22.50 per cent and 30 per cent respectively.