Small business owners have lamented Central bank of Nigeria’s new interest rate, describing it as unfortunate. They added that, due to the new interest rate, businesses will contract and downsize, leading to loss of jobs.
It will be recalled that the CBN had raised the MPR by 50 basis points from 26.75% to 27.25%. But it retained the asymmetric corridor of +500/-100 basis points. This marks the fifth interest rate hike in the past eight months, resulting in a cumulative increase of 850 basis points.
The CBN governor, Mr Olayemi Cardoso said the decision to further hike the rate was that of 11 of the 12-member Monetary Policy Committee, MPC, present at the meeting.
In response to the decision, small business owners, along with other stakeholders, criticised the Central Bank of Nigeria. They noted that this was an inappropriate time to implement such a rate hike.
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Dr. Femi Egbesola, the President of the Association of Small Business Owners of Nigeria (ASBON), stated that this policy would result in an additional contraction within the real sector of the economy.
The Centre for the Promotion of Private Enterprise, CPPE, has also tackled the CBN policy. It says it is at variance with the mood of most economic players and the desire to promote economic recovery.
However, CBN Governor Cardoso argued that the policy year has helped to moderate inflation.
