Two financial experts on Saturday in Lagos expressed worry over the rise in the inter-bank lending rate. ?
They told the News Agency of Nigeria (NAN) that the increase in the rate from 14.8 per cent to 17 per cent earlier in the week would have an adverse effect on the economy.
?The experts said that the increase would ?make the inflation rate to rise.
?Mr Oluwole Ibikunle, Managing Director, Boar Management and Financial Strategies Limited, attributed the increase to the upward review of the cash reserve ratio.
Ibikunle said that the cash reserve ratio was raised from 8 per cent to 12 per cent by the Monetary Policy Committee, at its last meeting in Abuja.
He explained that a result of the development was an increase in the rate at which banks borrowed from one another.
According to him, if the lending rate among banks goes up, they move up their interest rates and the customers?are made to?bear the brunt.
?“What determines the inter-bank lending rate is the forces of demand and supply and the purpose of any policy should be stipulated and pursued with effective machinery in place,“ lbikunle said.
He said that the rise in the inter-bank lending rate would affect the manufacturing sector negatively because the burden of the increase in interest rate would be transferred to consumers in the form of higher prices.
Mr Wole Olowu, General Manager, True Bond Micro Finance Bank Limited, said that the increase in the inter-bank lending rate would discourage borrowing from banks.
Olowu said the inability of the real sector to get loans from banks at cheaper rates would increase the unemployment rate and slow down productivity in the county.
“The apex bank needs to make interest rates attractive so that people can easily access loans at low rates, which will have a multiplier effect on the economy,“ he said. (NAN)