Omodele Adigun with Agency report
The Central Bank of Nigeria (CBN) will today and tomorrow in Abuja hold its first Monetary Policy Committee( MPC) meeting for the year after over four months of inactivity over failure to form a quorum.
The policy meet comes as experts are urging the apex bank to use the opportunity to slash the high interest rate charged by the nanks.
The CBN had scheduled its first MPC meeting for April 3 and April 4 following last month’s confirmation of Aisha Ahmad and Edward Lametek Adamu as CBN deputy governors by the Senate.
in an interview with a news agency Monday in Abuja, the Lead Director, Centre for Social Justice, Mr Eze Onyepere, said low interest rate decision should be one of the agenda of the meeting
According to him, this would encourage savings and forestall negative returns to depositors whilst at the same time providing the banks with enough latitude to recover their costs and make reasonable profit,’’ he said.
He urged CBN to ensure that commercial banks peg their lending rate not more than 400 basis points above the Monetary Policy Rate (MPR).
His words: “If the CBN can reduce the MPR rate by 200 basis points to 12 percent, the lending rate should be pegged at not more than 16 percent.
“This is justifiable because even the 16 per cent is higher than the current inflation rate that hovers around 14 per cent.In the alternative, if the above recommendation is not acceptable, the MPC may consider creating a corridor of not more than 600 basis points between the deposit and lending rates.
“Onyepere also harped on the need for a more prudent fiscal stance if the country’s interest rate was to come down quickly as expected by business operators.
He called on the CBN to ensure that it tackled the issue of hidden charges by banks operating in the country as it impacts negatively on monetary policies.
“Apart from the high lending rate, commercial banks have resorted to all manner of ‘hidden charges’ that still ensure that effectively, the real cost of funds is still very high.
“Also deductions from Automated Transaction Machines (ATMs) still contradicts the directives that N65 should only be deducted when a customer from another bank makes use of another bank ATM three (3) times.
“The CBN needs to weigh in on this,’’ he said.
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