Prof. Sheriffdeen Tella, a Senior Economist at the Olabisi Onabanjo University, Ago-Iwoye, Ogun, on Tuesday said retaining the benchmark interest rate at 12.5 per cent could fuel inflation.
Tella told our reporter in his reactions to the outcome of the Monetary Policy Committee meeting of the CBN that the interest rate was already too high.
“The interest rate is still too high.”
“This will have serious effect on the cost of borrowing and production.”
“The action of MPC will further fuel inflation in terms of cost of production,” Tella said.
It was reported that the apex bank had on Monday retained the Monetary Policy Rate (MPR), otherwise known as the benchmark interest rate, at 12.5 per cent alongside other monetary policy parameters.
Mr Godwin Emefiele, CBN Governor, said the MPC also retained the Cash Reserve Ratio (CRR) at 27.5 per cent as well as Liquidity Ratio at 30 per cent.