CBN Promises To Curb Rising Inflation Through Tight Monetary Measures

CBN Promises To Curb Rising Inflation Through Tight Monetary MeasuresThe Central Bank of Nigeria (CBN) has acknowledged that the country’s inflation rate remains unacceptably high but expressed confidence that its current monetary policies will eventually bring about improvement. According to the latest report from the National Bureau of Statistics, Nigeria’s headline inflation rose to 33.88% in October, up from 32.70% in September.....KINDLY READ THE FULL STORY HERE▶

CBN Governor Olayemi Cardoso addressed the inflation issue during the 2024 annual bankers’ dinner in Lagos, organized by the Chartered Institute of Bankers of Nigeria (CIBN). He noted that while the high inflation rate is a significant concern, there are indications that the tight monetary policy in place will positively impact the economy.

“I fully recognize the challenges that higher interest rates impose on businesses and families,” Cardoso said. “However, these measures are not intended to be permanent. We are closely monitoring the data and expect inflation to show sustained improvement in the near future, after which we will adjust rates accordingly.”

Cardoso added that the CBN’s current stance had already altered the previous negative economic trajectory, with expectations of a downward trend in inflation by 2025. He emphasized that the effects of monetary policy take time, typically six to nine months, to influence the consumer sector, but pointed to encouraging signs of improvement.

The CBN Governor also addressed the ongoing concerns surrounding the foreign exchange market, particularly the disinformation about a supposed demand-supply gap that has caused panic. “The current US dollar exchange rate reflects the price that the most desperate buyers are willing to pay, and this does not represent the true market value of Nigeria,” he stated.

Cardoso expressed optimism that the introduction of the electronic foreign exchange matching system would help stabilize the naira.

Despite the inflationary pressures, Cardoso highlighted the resilience of the Nigerian economy, citing growth from 2.98% in Q1 to 3.46% in Q3 of 2024. He also noted that the banking sector had remained strong despite challenges like inflation and exchange rate fluctuations, and that the ongoing bank recapitalization efforts would further strengthen Nigeria’s financial system.

The Governor concluded by reaffirming that the CBN’s efforts were crucial in supporting the goal of a $1 trillion economy by 2030, underscoring the long-term economic reforms underway to stabilize Nigeria’s economy.

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