The Centre for the Promotion of Private Enterprise (CPPE) says halting the interest rate hike is preferable due to the challenges businesses are facing.
Muda Yusuf, chief executive officer (CEO) of CPPE, spoke in a statement on Tuesday while responding to the outcome of the monetary policy committee (MPC) meeting of the CBN.
On July 22, Yusuf had asked the CBN to halt the interest rate hike or consider a minimal increase, given the bank’s stabilisation efforts to curb the inflation rate which recently climbed to 34.19 percent.
The CBN had earlier today announced the adjustment of the monetary policy rate (MPR), which banks use to set their interest rate, from 26.25 percent to 26.75 percent to address the surging inflation in the country.
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Yusuf said the moderate increase was tolerable and showed that the CBN was listening and responding to the suggestions of financial stakeholders to stop aggressive tightening measures.
However, Yusuf said he preferred a pause on interest rate increases because of the current challenges faced by businesses.
“The marginal increase marks a softening of the tightening stance. It is tolerable,” Yusuf said.
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The CPPE boss also called for speedy implementation of fiscal policy measures to tackle inflation.
“Already, the economic stabilisation plan contains some laudable fiscal policy measures that could reduce production costs in the economy,” he said.
“It is also important and urgent for the government to adopt and quickly implement the recommendation of the presidential committee on fiscal and tax reforms on the customs duty exchange rate, which proposed N800 per dollar.”
Yusuf said the adoption of this recommendation would have a considerable impact on the cost of goods and services in the country.
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