Expert urges CBN to focus attention on curbing inflation

A Financial Expert, Mr Okechukwu Unegbu, has urged the Monetary Policy Committee of the Central Bank of Nigeria (CBN) to focus on policy decisions that would curb rising inflation and stabilise the Naira.
Unegbu, a past president of the Chartered Institute of Bankers of Nigeria (CIBN) gave the advice on Sundays when he spoke against the backdrop of the forthcoming MPC meeting scheduled for July 26 and July 27.
He said that the unabated depreciation of the Naira had become inexplicable considering certain indices that were supposed to strengthen and stabilise the currency.
Unegbu urged the committee to carry out a comparative analysis of its past meetings and the effect they had on the economy to be guided on the right decisions to take.
“The MPC should do a comparative analysis to know the effect of their parameters on the economy, having retained the same parameters for about six times now.
“Inflation rate is still high; interest rate keeps fluctuating. The foreign exchange market is the worst.
“One dollar is almost equivalent to N500, but when you have N500 in Nigeria you can still afford a decent meal of rice, beans and even beef.
“But in the United States one dollar cannot get you anything. It is a bit of an enigma,” he said.
Unegbu said this could be attributed to lack of confidence in the economy, as many Nigerians are now saving in dollars, instead of Naira with the hope that they will get higher value to boost their material acquisitions.
The expert urged the MPC to take urgent and practical steps to strengthen and stabilise the Naira.
He added that, with the recent surge in international price of crude oil, and inflow of huge diaspora remittances into the economy, the Naira ought to be stronger and more stable.
He urged the committee to also consider the rising case of unemployment and come up with policy decisions to curb it.
“The MPC should consider the effect of the surge in the price of crude oil and diaspora remittances on the economy.
“Members should also consider the level of unemployment because they are supposed to manage the economy by advising government, ” he said
At its last meeting in May, the MPC retained the Monetary Policy Rate (MPR) for the fifth consecutive time, at 11.5 per cent, while all other parameters were also retained.
The asymmetric corridor was retained at +100/-700 basis points around the MPR; Cash Reserve Ratio *CRR) at 27.5 per cent and Liquidity Ratio at 30 per cent.