Nigeria: Report Suggests Nigerians Prefer Low Interest Rates, High Inflation

Photo: This Day
Market place.
23 October 2018

Abuja — A report by the Central Bank of Nigeria (CBN) has revealed that Nigerians will rather have inflation rise than experience further surge in interest rates.

Respondents also believed that the economy would end up weaker if prices rose faster than their current levels.

The Headline index is presently at 11.28 percent according to the National Bureau of Statistics (NBS) while the CBN has the Monetary Policy Rate (MPR), also known as interest rate at 14 percent.

The MPR is the rate at which the apex bank lends to commercial banks and often determines the cost of borrowing in the economy.

But according to the Inflation Attitude Survey (IAS) report for the third quarter of the year, Q3 2018, which was posted on its website, "Given a trade-off between inflation and interest rates, more respondents prefer interest rates to fall, while inflation rate rises. ·

"Majority of the respondents are of the view that it would be best for the Nigerian economy if interest rates went down."

The survey added:"While some of the respondents are aware that the CBN influences the direction of interest rates to control inflation, majority has no idea.

However, the CBN, aside from its price and monetary stability mandate, is also tasked with supporting Government's policies on economic growth and unemployment reduction.

One of the objectives of the apex bank is to build public confidence and support for sustainable economic development and public understanding of the Monetary Policy Committee's roles.

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