The Central Bank of Nigeria has been advised to bring down monetary policy rates and lending rates as well as to pursue monetary easing approach in 2017 in other to revitalize the economy.
A Professor of Economics with the Department of Economics, Olabii Onabanjo University, Ago-Iwoye, Ogun State, Prof. Sheriffadeen Tella, gave the advice in an interview with National Daily on Tuesday.
He said the lack of production in the economy due to among others, high interest rates and continuous capital outflow through importation and over invoicing or capital flight contributed to development in the forex market.
According to him, the CBN must adopt monetary or quantitative easing
whereby it buys financial assets from the private sector to stimulate the economy through private sector spending.
He said there was a need for temporary restrictive policy on some imports until domestic production improves towards the end of the second quarter of the year if the 2017 budget implementation commenced in time.
“There is still a large amount of Naira in the economy to fund speculative activities and those who have such money can buy foreign currency at any rate since it does not cost them anything.”
He attributed the development at the foreign exchange market to speculative attack on the nation’s currency.
Tella noted that colour swapping of the Naira was still an option to reduce speculative attack on the currency.
“The reasons are based on activities of speculators, largely those who have stockpiled Naira at home and converting same to foreign currency and for which I advocated change in or swapping of colour of N500 and N1, 000 notes.”