Finance and economic experts, who said that the decision taken by the apex bank at the 294th Monetary Policy Committee meeting, called for more fiscal initiatives to support long-term price stability and economic growth.
Amolegbe said the hike was expected as it appeared that hiking the rate was having the right impact on the exchange rate and hopefully on inflation rate. Ademola, a chartered financial analyst, said the increase as a short-term measure was necessary in the face of the continuously surging inflation and the exchange rate volatility.According to him, only such actions by the monetary authority can be used to try to stabilise things before the longer-term fiscal policies take effects.
“Following the MPC decision, the market would reprice all financial instruments and banks would also increase deposit and lending rates. The equity market may also suffer from portfolio rebalance and investors adjust their assets allocation to more of fixed income securities.
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