• Business - Companies
  • Updated: September 28, 2022

Economist Says Interest Rate Hike By CBN Will Put Pressure On Private Sector

Prof. Evans Osabuohien, an economist who is also Head of Economics Department, Covenant University, Ota has disclosed that the increase in Monetary Policy Rate (MPR) by the Monetary Policy Committee (MPC) Central Bank of Nigeria (CBN) will further put pressure on the already pressured private sector.

Osabuohien disclosed this during an interview with the News Agency of Nigeria (NAN) in Ota, Ogun on Wednesday.

Allnews Nigeria reports that the Monetary Policy Committee of the Central Bank of Nigeria has unanimously voted to increase the benchmark interest rate (monetary policy rate) to 15.5% from 14%.

The economist revealed that the loanable funds would be limited and increase the cost of loanable funds to investors.

“The decision of the MPC to hike the MPR will obviously increase the cost of borrowing, whether in the manufacturing or productive sector, thus leading to a shortage of loanable funds.

“In addition, the nation should expect higher inflation in the near future,” he said.

Osabuohien further explained that the principle adopted by the MPC cannot work because the money in the economy is limited, adding that the only way the principle could work if there were too much money in circulation.

“The inflation we are experiencing is not money induced, but it is induced more by imported inflation,” he said.


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Felicia Abisola  Olamiji
Felicia Abisola Olamiji

  A graduate of English Language from Olabisi Onabanjo University, passionate about learning new...

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