Ogbodo Ozioma Favour
The Edo state Governor, Godwin Obaseki has frowned at the decision of the Central Bank of Nigeria (CBN) on Tuesday to increase the Monetary Policy Rate (MPR) from 18.75% to 22.75%.
The Governor of CBN Yemi Cardoso was quoted as saying, “All 12 members of the committee decided to further tighten monetary policy by raising the MPR by 400 basis points to 22.75 per cent from 18.75 per cent. Adjust the asymmetric corridor around the MPR to +100 to -700 from plus 100 to -300 basis points”.
But in his reaction, Obaseki while attending the Edo Zone Bankers Committee said, “countering that our economy shouldn’t be determined by exchange rate alone and reserving cash will be detrimental to our economy”.
The Edo state governor reportedly said, “I understand that the monetary rational for increasing MPR but fundamentally and fiscally, it is not going to lead to growth in our economy. We must focus on the fundamentals which is increasing production, making sure our citizens produce the goods and services we consume and depend less on import.
“Our economic policy and monetary policy cannot be determined by exchange rate alone. So, this whole issue of increasing the cash reserves in a bid to tighten liquidity is going to be detrimental to our economy. I understand the challenge the monetary authorities face but unfortunately you cannot plan with one hand.
“The economy is about fiscal and monetary policies, both must work hand in hand and when they don’t as they don’t in Nigeria, we will have a crisis. So, we should focus on fiscal issues so that we can grow our economy and solve the challenges we have.
“We should not panic too much because of foreign exchange, we must focus on how we can do things within our economy, how we can grow our economy to earn more foreign exchange. Foreign exchange is our problem, but I believe that creating jobs for young people should be more of a priority for us a people at this time.”
