The Lagos Chamber of Commerce and Industry (LCCI) has endorsed the Monetary Policy Committee’s (MPC) decision to hold the stance by retaining policy rates, saying it is most appropriate given the circumstances.
Dr Muda Yusuf, LCCI Director-General, gave the endorsement in a statement on in reaction to the outcome of the 278th Monetary Policy Committee meeting on Tuesday.
The Central Bank of Nigeria retained policy parameters with MPR at 11.5 per cent, Cash Reserve Ratio (CRR) at 27.5 per cent, and Liquidity Ratio at 30 per cent.
Yusuf, noting the nation’s recent macro development, said the sustained intervention efforts of the bank would further enhance credit flows to the real economy, stimulate output growth and ultimately moderate inflationary pressures.
“The LCCI notes the decision of the Monetary Policy Committee of the Central Bank of Nigeria to retain policy parameters during its March 2021 meeting.
“The LCCI appreciates the dilemma which the current stagflation condition presents to the monetary authorities.
“We note the imperative of striking a balance between stimulating output growth and curbing intensifying inflationary pressures.
“We endorse the position of the MPC on need for fiscal authorities to expedite actions in addressing these challenges and other investment climate issues constraining the supply side of the economy and fuelling inflationary pressures,” he said.
The LCCI DG, however, requested that the MPC focused more attention on its deliberations to the foreign exchange policy because of its profound implications for economic performance and the confidence of investors.
According to him, foreign exchange policies are as important as liquidity management concerns.
He noted with concern the divergent positions of both the fiscal and monetary authorities on the country’s foreign exchange policy framework.
Yusuf stressed that the lack of coherence among policymakers sent a negative signal to the investment community, aggravated uncertainty and undermined the confidence of investors.
“Foreign exchange framework is key to the price stability mandate of the CBN.
“It is important for the fiscal authorities, CBN and Economic Advisory Council to be on the same page as far as the country’s foreign exchange policy framework is concerned,” he said.
