Close saving/lending rate gap to boost economy, Expert urges CBN

A financial expert, Dr Samuel Nzekwe, has advised the Central Bank of Nigeria (CBN) to reduce the disparity in the saving and lending rates in order to boost the economy.

Nzekwe, a former President, Association of National Accountants of Nigeria (ANAN), gave the advice in an interview with our reporter in Ota, Ogun, on Tuesday.

It was reported that the expert spoke ahead of the Monetary Policy Committee (MPC) meeting of the CBN, holding between Jan. 23 and Jan. 24 in Abuja.

Nzekwe said that bridging the gap in the interest rates on saving and lending would reduce distortion in the economy.

He called on the apex bank to increase the interest rate on saving, which is currently between six and seven percent, to attract more people into the financial sector.

This, he said, would further boost the inclusive policy of the CBN.

“MPC also needs to reduce the lending rate, which is currently at 13.5 percent, so that more investors can have access to loans at lower interest rate.

“In addition, the Cash Reserve Ratio of 22.5 percent should be reduced in order to make funds available to the banks, so that they can borrow to grow the productive sector,’’ he said.

Nzeribe said that this development would encourage the productive sector to produce at an optimal level, thus drastically reducing the country’s inflation rate.