Adeosun calls for lower interest rates, as Central Bank holds MPC

Adeosun calls for lower interest rates, as Central Bank holds MPCAs the Central Bank’s Monetary Policy committee meets for its 252 session, Finance Minister, Kemi Adeosun, is earnestly hoping that the  Committee would lower its bench mark monetary policy rate so as to moderate domestic borrowing costs for government and the private sector.

The MPC members, whose two day meeting come to an end tomorrow, are meeting for the first time since state statistics bureau, the National Bureau of Statistics (NBS), officially confirmed that Nigeria’s economy was in recession.

The last time the 12-man committee met, which was in July, the benchmark lending rate was revised upwards by 200 basis points to 14 percent from 12 percent. A decision the committee said was necessary to lure investors with positive yields after headline inflation accelerated to 16.5 percent in June and amid a global array of negative rates in key frontier markets.

Despite easing by one percent month-on-month, July inflation remained on an upward swing, touching an 11 year high of 17.1 percent.

As indications point to another rate hike, Adeosun, who spoke at an interview on CNBC Africa on Monday, said “We need lower interest rates because when we are borrowing and interest rates go up, it increases our cost of debt service and it reduces the amount of money that is available to spend on capital projects,” she said.

“The attempt was to manage inflation and the trade-off for the economy right now is what the bigger problem is: Is it growth or inflation? For me it is growth. I would rather seek growth. We can manage inflation. I think for us, at the moment in the Nigerian economy, growth is the most important thing.”