Abuja – Mr Rafiq Raji, Chief Economist, Macroafricaintel Investment LLC, says the cut in lending rate by 50 basis points was a positive move.
He said this during an interview , on Wednesday in Abuja.
He said that though his expectation of a likely cut to 13 per cent was in the second quarter of the year, the slight reduction came as a surprise.
“Having decided to cut rates, I would have loved a bolder move. A 50 basis point cut would probably do no more than signal the beginning of an easing cycle.”
Another economic and financial analyst, Mr David Ibidapo, said the cut was not significant enough to be a problem or to incite economic growth.
“It’s just a “let’s do something” move. They had a window to cut before the income hike and they took it. Now if they increase income, they can increase interest rate to control inflation.”
He said that the cut would not enhance credit to the private sector as there were still structural hindrances to credit extensions.
Ibidapo also said that risks in the business environment were still prevalent.
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN), on Tuesday cut the benchmark lending rate from 14 per cent to 13.5 per cent to further promote economic growth.
The cut is the first of its kind since July 2016 as the rate had been maintained at 14 per cent.
The CBN Governor, Mr Godwin Emefiele, said the cut would further uphold the bank’s commitment to promoting strong growth by way of encouraging credit flow to the productive sector of the economy. (NAN)