CENTRAL BANKING AND MACROECONOMIC UNDERDEVELOPMENT.PART6

Substitution and partial dollarisation in the economy"; a development which the MPC Communique decries and sadly recognizes to have also significantly fuelled the unusually high demand for forex. Consequently the committee,reaffirmed that"the naira remained the currency of transaction in the economy and therefore advised the CBN to take all possible measures to address the development" At this point in time in 2014 when naira was still far below 300naira to the dollar so to say 200naira,Henry Boyo belching his carthasis lamented the decision of the CBN's MPC a committee setting interest rates for their policy blunder fixing rate at 13percent also directly challenged dollarisation and tackling the symptoms rather than the actual problem of too much naira in circulation.Why should the committee having realized the problem decided to still embrace the punitive or deterrent rates of 13percent?Knowing the implications that banks would charge above 20percent,in addition to penal effect on critical sectors creating mass employment specifically the real sector,ironically suffocating with the attendant production cost and explosion in general prices worsened by higher cost of funds and deteriorating price stability.Yet would not stop its hypocritical sermons to banks to reduce the punitive interest rate it set periodically.Did the threat of Dollarisation not the headache of CBN governors decried ever since 1999? He proffered the solution effectively as it