Governor of the Central Bank of Nigeria (CBN), Yemi Cardoso, has stated that the N27 trillion ways and means (W&M) and the N10 trillion intervention funds that failed are partially to blame for Nigeria’s high rate of inflation. Cardoso made this statement during the BusinessDay CEO Forum Tuesday in Lagos.
With controlling inflation as the main goal, Cardoso claimed that the Monetary Policy Committee (MPC) members’ independence and professionalism are providing the right instruments to do so.
“The MPC is not oblivious to the fact that ultimately we do want growth. The naira-dollar exchange rate was on the verge of collapse if these hikes had not been implemented at the time they were. This helps to stabilize it.”
“Secondly, there is a timing problem. It is not something that we will always have. Fiscal concerns are being mitigated, as is the ability to absorb all excess liquidity in the economy and eventually balance things out.”
“From what I can tell, that is the most crucial thing for the MPC. This year, between February and May, there was a 50% decrease in the monthly rate of inflation. I get the impression that there isn’t a one-size-fits-all solution for this. It is my belief that the interest rate will decrease soon.”
The unchecked liquidity in the economy, he continued, has made inflationary pressure more difficult to understand.
“Unfortunately, we have a circumstance in which a large amount of money supply entered the system. We all witnessed the means and ways surge to N27 trillion. We observed interventions totaling N10.5 trillion. It has repercussions. In large part, that is what we are currently paying for,” he stated.
