The Independent Media and Policy Initiative (IMPI) has welcomed the decision by the Central Bank of Nigeria (CBN) to cut the benchmark interest rate by 50 basis points to 27 per cent.
In a statement signed by its Chairman Dr Omoniyi Akinsiju, the think tank argued that the CBN’s decision aligns with the position its analysts took in its recent policy statement.
”We welcome the announcement by the Central Bank’s Monetary Policy Committee (MPC) of a 50 basis-point reduction to 27 per cent after five years. We believe this is the first in the threshold of monetary easing over the next three quarter to be undertaken by the apex bank.
”It totally aligns with the position we took in our policy statement 029, recently, in which we projected that the apex bank would soon ease the Monetary Policy Rate (MPR) on the back of five consecutive months of decline in headline inflation and a stronger naira.
”We had also previously projected a 5 per cent growth in Gross Domestic Product (GDP) in 2025 as opposed to a forecast by the International Monetary Fund (IMF) of a 3.4 per cent growth in the same year.
”For us, the apex bank’s decision is an affirmation that appropriate initiatives are in place to ensure that monetary policies align with fiscal policies so it is not really surprising that the Central Bank’s MPC had to ease its hold on benchmark interest rates.
”What it means is that the CBN properly read the economic barometer well because the decision was properly guided by objective data on the country’s inflation and the GDP growth.
”The implication now is that businesses can now borrow at a lower rate which will reflect positively on the country’s business environment in terms of reduction in prices of goods and services, going forward.
”So we can comfortably affirm that our projection of a further reduction in headline inflation from 20.12 per cent to 17 per cent by December is more realistic now that CBN has reduced interest rate on borrowing for the first time since the COVID-19 pandemic,” the statement added.
The think tank also urged the federal authorities to continue to deploy appropriate policies to ensure the economy remains on a positive trajectory.
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