The Central Bank of Nigeria (CBN) has admitted that the inflation rate in the country is unacceptably high.
In its most recent report of the National Bureau of Statistics, the Nigeria’s headline inflation rate rose to 33.88 per cent in October from the 32.70 per cent recorded in September.
The position on the inflation rate was stated by the CBN Governor, Olayemi Cardoso, during the 2024 annual bankers dinner in Lagos organised by the Chartered Institute of Bankers of Nigeria (CIBN).
Cardoso however argued that there are signs its monetary policy would change the economic situation.
“I fully recognise the challenges that higher interest rates impose on businesses and families. However, these measures are not intended to be permanent. We are closely monitoring the data and as inflation shows sustained signs of improvement, something we expect in the near future, we will adjust rates accordingly.
“Our tight monetary policy stance has altered the previous dire trajectory and we expect a downward trend in 2025. Inflation remains unacceptably high, but the signs are encouraging, particularly given that the full effects of monetary policy typically take six to nine months to impact the consumer sector,” he said.
“It is also vital to address the disinformation circulating about a supposed demand supply gap in the FX market which is fuelling unnecessary panic.”
“The current US dollar exchange rate reflects the price that the most desperate buyers are willing to pay and this, in my view, does not represent the true market value of Nigeria,” he said.
He expressed hope that the country’s introduction of the electronic foreign exchange matching system will stabilise the naira.
“For example, the Nigerian economy continues to be more resilient and agile as shown in the steady growth from 2.98 per cent in Q1 to 3.19 per cent in Q2 and now 3.46 per cent in Q3 of 2024.”
Likewise, the Nigerian banking industry has also shown resilience this year despite the macroeconomic pressures such as rising inflation, and exchange rate fluctuations, amongst others.
“The bank recapitalisation exercise also attests to the fact that we are well on our way towards not only strengthening the financial sector but also supporting a $1 trillion economy envisaged by 2030,” he said.
Nigeria has continued to face economic challenges that led to a spike in inflation rate and growing economic discomfort.