Lagos – Mr Goodie Ibru, President of Lagos Chamber of Commerce and Industry (LCCI), on Monday said there had been steady decline in aggregate credit to the private sector.
Ibru said this in a statement made available to newsmen in Lagos..
He said that the refusal of Monetary Policy Committee (MPC) to reduce the Monetary Policy Rate (MPR) from 12 per cent had led to difficulties in getting credit facilities from banks.
Ibru said that there was the need for a review and subsequent reduction of the current MPR and other monetary rates.
‘‘A Central Bank of Nigeria Economic Report revealed that aggregate net credit by banks to the domestic economy fell by 2.7 per cent and 0.1 per cent in the second and first quarter of the year, respectively.
‘‘This is largely due to the sustained monetary tightening, significant rise in government domestic borrowing, and attractive yield of government bonds and treasury bills.
‘‘The tight monetary policy stance continues to keep funds out of the reach of the private sector,’’ he said.
Ibru said that the plan to issue new treasury bills to absorb all maturing bills in the fourth quarter would further tighten liquidity and negatively affect the private sector.
‘‘Since July 2010, the MPC has adjusted the MPR by 100 per cent from six per cent to 12 per cent.
“The committee has sustained the symmetric corridor at 200 basis points and retained Cash Reserve Ratio (CRR) at 12 per cent.
‘‘MPC also retained the minimum liquidity ratio at 30 per cent.
‘‘It is important for the monetary authority to commence an adjustment of monetary policy course, albeit gradually, toward boosting private sector credit, domestic demand, employment and growth,’’ he said. (NAN)