GNA Sunyani in ecstatic mood as Bofoakwa returns to GPL after 16 years GNA Heartbreak for Eleven Wonders as Bofoakwa Tano makes GPL comeback after 16-year absence GNA 2024 Olympic Games: Ghana to play Guinea in first round of qualifiers GNA AASC re-confirms sports codes for 13th Africa Games, nine to be Olympic qualifiers GNA Ernest Nuamah handed debut Black Stars call-up GNA Nuamah earns debut call-up as Chris Hughton names 24-man squad for Madagascar clash GNA Joseph Andoh wins Ghana’s Fastest Human race in Cape Coast NAN Fuel subsidy removal in Nigerians’ interest, to avoid collapse of economy — TSG NAN CSO backs Tinubu on removal of petroleum subsidy NAN Coalition urges Tinubu to tackle challenges in education sector

Inflation: Economists fault rate hike, urge CBN to focus on key drivers

  26 Mai      3        Economy (13952),


Lagos, May 26, 2023 (NAN) Some Economists have urged the Central Bank of Nigeria (CBN) to focus more on supply side or cost push factors and structural issues fueling inflation in the country.

The experts told the News Agency of Nigeria (NAN) on Friday in Lagos that the repeated interest rate hikes had done little to stop the upward trend in inflation.

NAN reports that the apex bank on May 24, raised the Monetary Policy Rate (MPR) for the seventh time to 18.5 per cent from 18 per cent.

The MPR is the baseline interest rate in an economy, on which every other interest rate used within an economy is built.

The Monetary Policy Committee had raised the MPR from 17.5 per cent to 18 per cent at its last meeting in March.

The members voted to retain the Asymmetric Corridor of +100/-700 basis points around the MPR, retain the Cash Reserve Ratio (CRR) of 32.5 per cent and retain the Liquidity Ratio of 30 per cent.

Prof. Ndubisi Nwokoma, Director, Centre for Economic Policy Analysis and Research, University of Lagos, advised CBN to focus its attention on the cost push factors as they drive inflation.

“On the increase in the MPR, I think the CBN is still battling with the inflation issue, which is proper.

“The CBN should focus more on the cost push factors of inflation, like the  increased costs of production due to supply chain disruptions, exchange rate instability as well as increased price expectations due to the country’s fiscal challenges,’’ he said.

Nwokoma, however, said the apex bank needed to also know that the negative consequences of its naira redesign and cashless policies were still affecting the inflation rate as they had not significantly moderated since cash became more available after the crisis earlier in the year.

Also, Uchenna Uwaleke, a Professor of Finance and Capital market at Nasarawa State University, Keffi, said that the hike in MPR to 18.5 per cent was not in the interest of output growth.

According to him, the repeated rate hike has further stifled access to credit for Micro Small and Medium-sized Enterprises.

“Besides, it may do little to halt the upward trend in inflation as recent experience has shown.

“Any significant moderation in inflation rate can only come from dealing with supply side factors and structural issues fueling rising prices such as insecurity, electricity and fuel challenges,’’he said.

Dans la même catégorie