Retention of Benchmark Interest Rate Reasonable — Utomi

• Retention of Benchmark Interest Rate Reasonable — Utomi

A professor of Political Economy and management expert, Pat Utomi, has said the retention of the Monetary Policy Rate (the benchmark interest rate) by the Monetary Policy Committee of the Central Bank of Nigeria is reasonable.

Utomi was quoted by the News Agency of Nigeria as saying on Wednesday in Lagos, “At this particular point in time, I think the Monetary Policy Rate is quite muted. In a situation like this, if there is any action to take, it is either you stay where you are or the CBN tries to incentivise people to do things.

“We’ve got into a terrible mood in Nigeria where nine months into the election, people stopped investing and for 14 months after to assess how things are settled.

“So, in that period, unfortunately, incentives are what the monetary policy guideline is supposed to do. This is either to stimulate or bring about contraction in money supply to manage inflation not very critical.”

According to Utomi, what was typical about an election year was a lot of money being pumped into the system but that has stopped because of the disposition of the current leadership.

He said, “I think it is good relative to the madness that election is becoming in our country. There is really no pressure to curtail money supply from the politicians in the system.

“More importantly, there is not any investment going round that the economy could become overheated. It is reasonable to see the retention of the current rates by the MPC.”