Governor of Central Bank of Nigeria
(CBN), Mr. Godwin Emefiele, yester- day, said save for the contractionary monetary stance adopted by the bank since May 2022, the country’s inflationary pressures would have been higher by over 800 basis points.
Emefiele said without the bank’s efforts, inflation would have been 30.48 per cent, compared to the current 22.22 per cent recorded in April.
The CBN governor made the clarification against the backdrop of concerns that the continued hike in the benchmark interest rate had not helped to douse inflation.
Addressing journalists at the end of the two-day meeting of the Monetary Policy Committee (MPC) in Abuja, Emefiele said the committee noted the persisting uptick in inflation, as headline inflation (year-on-year) rose to 22.22 per cent in April 2023, from 22.04 per cent in the preceding month. He added that this amounted to a moderate increase of 0.18 percentage point.
He said the recent uptick was driven largely by the increase in both the food and core components, which rose moderately to 24.61 and 20.14 per cent in April 2023, from 24.45 and 19.86 per cent, respectively, in March 2023.
Emefiele’s assertions came as the MPC resolved to raise the Monetary Policy Rate (MPR), otherwise known as interest rate, by 50 basis points to 18.5 per cent, from 18 per cent.
The MPR is the rate at which the central bank lends to commercial banks and often determines the cost of funds in the economy.
Emefiele said the moderate hike in MPR was made to further rein in inflation, adding that the lingering
insecurity in major food-producing areas; high cost of transportation driven by rising energy costs; activities of middlemen in the food distribution channels, as well as the persistence of shocks from legacy infrastructural bottlenecks, remain major drivers of the inflationary pressure.
Emefiele said if the apex bank had not taken aggressive actions along the line, inflation would have been unbearable for Nigerians currently.
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