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Economists forecast lending rate hike ahead of MPC meeting

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Financial experts have predicted a rise in the lending rates in the country, ahead of the two-day Monetary Policy Committee meeting starting today (Monday).

The Monetary Policy Rate was raised to 18.5 per cent at the last MPC meeting.

An economic expert and former Assistant Head of Research at the CBN, Jonathan Aremu said that given the current economic indices, there was a high likelihood of a hike in MPR.

He said, “It is not an arbitrary movement. As much as possible, they need to equate it with how much they can manage the monetary flow. If there is so much money in the economy as it now, prices will rise, and if prices rise, you have to raise it.”

Also, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Muda Yusuf, said the apex bank would increase the MPR in order to contain the rising inflation and recent spike in the money supply in the economy.

Yusuf said, “Yes. They will increase it, especially with inflation, pressure on the exchange rate, and the surge in liquidity. We saw an increase of N9tn in money supply which is unprecedented. Something must be done to curb that growth of liquidity.”

Lead analyst for Nigeria at Scope Ratings, Thomas Gillet, said, “We expect Nigeria’s monetary policy rate to be raised by 100 basis points to 19.5 per cent as reforms recently introduced will exacerbate near-term inflation that is already running close to record highs.”