Experts commend CBN for reducing MPR, CRR

Some financial experts on Wednesday commended the Central Bank of Nigeria (CBN) for its decision to adjust downwards its monetary policy rates.

The experts, who spoke in separate interviews with the News Agency of Nigeria (NAN) in Ota, Ogun, said that banks would now be more comfortable to lend to the real sector.

Dr. Wale Adegbite, the President, Ogun Chapter of Manufacturers Association of Nigeria (MAN), commended the downward adjustment of the Monetary Policy Rate (MPR) and Cash Reserve Ratio (CRR).

Adegbite said the reduction in MPR was commendable because it would enable banks to lend at lower rates to the real sector.
The CBN announced the adjustment of the rates after a two-day meeting of its Monetary Policy Committee (MPC) in Abuja on Tuesday.

The Monetary Policy Rate (MPR) was adjusted from 13 per cent to 11 per cent, while the Cash Reserve Ratio (CRR) was adjusted from 25 per cent to 20 per cent.

The CBN said that the measures were to check inflation in the country.

MAN president said that the adjustment of the monetary policy rates would make more funds available to manufacturers to do business.

He, however, expressed regret that Nigerian banks preferred to invest in treasury bills rather than lend to manufacturers.

Adegbite said this preference by bankers was due to the high risk of doing business in the country.

“Commercial banks in Nigeria believe that the real sector finds it difficult to make profit due to infrastructure challenges like poor power supply and inadequate transportation system,’’ he said.

The MAN chief said that the Federal Government needed to address the nation’s infrastructural problems to enable banks to lend effectively to the real sector.

Dr. Titus Okunronmu, a former CBN Director, said lowering the interest rates was a welcome development, saying that there had been lots of complaints about the high interest rates in the financial sector.