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Former Bank Chief Wants MPC To Reduce Rates

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As CBN holds its 275th quarterly Monetary Policy Committee (MPC) meeting on Monday, a Financial expert, Mr Okechukwu Unegbe called for reduction of  lending rates by banks to encourage investment.

Unegbe, who is a Past President of Chattered Institute of Bankers of Nigeria (CIBN) made the call in an interview with News Agency of Nigeria (NAN) in Abuja.

He suggested that the lending rate should be reviewed downwards from its present rate of about 15 per cent to encourage investor borrowings.

He said that such a step would improve job creation, poverty reduction and economic growth.

“The MPC should look at the interest rate issue, particularly lending rates by the banks.

“Deposit rate is almost zero but the lending rate is still high.

“They should consider a downward review of the lending rate so as to encourage borrowing for investment,’’ he said.

Unegbe, a former Managing Director of the defunct Citizens International Bank also urged the CBN to initiate a credit culture in Nigeria as way of further improving the economy.

He said that the bank should work with government to find ways of making resources available to help businesses survive as a result of challenges posed by COVID-19.

“CBN should initiate a credit culture in Nigeria so that people can raise small monies for certain expenditure.

“There is also the need to fund the economy by assisting businesses survive economic challenges posed by COVID-19.

“That is what the American government did recently by setting aside two trillion dollars to support businesses.

“Some private schools in Nigeria, for instance, will have to close down if they do not get some form of palliatives from government,’’ he said.

He urged the committee to come out with policies through which the CBN, working with the fiscal sector, could generate employment and reduce poverty.

NAN reports that the MPC is the highest policy making committee of the CBN, which has the responsibility of formulating monetary and credit policy functions.

The 11 member committee comprises the governor of the bank who is the chairman and the four deputy governors of the bank.

Others are two members of the board of directors of the bank, three members appointed by the president, and two members appointed by the governor.

The MPC was inaugurated in 2005.

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