Edo State Governor, Godwin Obaseki has faulted the Central Bank of Nigeria for raising the Monetary Policy Rate by twenty-two seven five percent, arguing that the decision is not the answer to the ongoing economic challenges in the country.
The governor, speaking in Benin City, said he however, supported boosting local production to meet the demand for goods and services.
He added that the focus must be on the fundamentals which are increasing production, making sure the citizens produce the goods and services consumed and depend less on imports.
He stated that the nation’s economic and monetary policy cannot be determined by exchange rate alone and as such, the plan of increasing the cash reserves in a bid to tighten liquidity is going to be detrimental to the economy.
He 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 the fiscal and monetary policies, both must work hand in hand and when they don’t, as they don’t in Nigeria, we will have crises. So, we should focus on fiscal issues so that we can grow our economy out of the challenges we have.”
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