Dr Titus Okunronmu, a former Director, Central Bank of Nigeria (CBN), Budgetary Department, has commended the retention of Monetary Policy Rate (MPR) at 14 per cent by the Monetary Policy Committee (MPC).
Okunronmu gave the commendation in an interview with Newsmen in Ota, Ogun on Friday.
The former director, who was reacting to the committee’s decision to retain the monetary policy at the existing rate, said the development was meant to stabilise the economy.
According to him, the Federal Government is borrowing heavily to finance the annual budget because the total revenue cannot cover the recurrent expenditure
“If the government is borrowing money and spent, we must expect inflationary impact on the economy,” he said.
The former CBN director explained that the committee was trying to ensure some level of stability in the system to check the effects of government borrowing.
MPC had on Wednesday, concluded its two-day meeting and retained MPR, the rate at which the CBN lends money to commercial banks at 14 per cent.
The committee said the benchmark interest rate was 14 per cent with the asymmetric corridor between 200bps and 500bps around.
It also said the Cash Reserve Ratio (CRR) was at 22.5 per cent and the Liquidity Ratio at 30 per cent.