Olayemi Cardoso, governor of the Central Bank of Nigeria, has identified the government’s large purchases of food as a contributor to the country’s galloping food inflation.
This was revealed in his remarks at the March Monetary Policy Committee meeting, which were posted on the CBN website on Monday.
The benchmark interest rate was increased by the MPC at the meeting from 22.75 percent to 24.75 percent, citing the need to combat inflation.
In March, however, the country’s inflation rate jumped to 33.2%, according to the Consumer Price Index report that the Nigerian Bureau of Statistics (NBS) released in April.
The food inflation rate also reached 40.01 per cent, with a year-on-year increase of 15.56 percentage points from 24.45 per cent in March 2023.The CBN governor, in his contribution, noted that inflationary pressure had failed to abate despite notable stability in the foreign exchange market.
He said, “Despite notable stability in the foreign exchange market resulting from decisions taken at that 293rd MPC meeting, inflationary pressure remains unabated.
While there is the argument that the significant tightening since the last MPC meeting is yet to fully permeate the system and yield its expected impact, the risk of galloping inflation persists.“If such a hyperinflationary scenario is to become reality, available options to control inflation could be severely constrained.
From the facts presented to the MPC, there is a clear indication that the monetary factors contributing to inflation are diminishing in their significance.
