The Governor of the Central Bank of Nigeria (CBN), Mr Yemi Cardoso, has said the bank’s efforts to tame inflation and pressures on the foreign exchange market will begin to yield results in the first quarter of next year.
Mr Cardoso spoke during a press conference in Abuja to announce the outcomes of the two-day meeting of the Monetary Policy Committee (MPC) which raised the Monetary Policy Rate (MPR) for the sixth time in 2024 by 25 basis points to 27.50 percent on Tuesday.
He said the apex bank is using every possible strategy to tame inflation with a firm assurance that ongoing monetary tightening measures, which it has done for six times alone this year, will have a favourable outcome.
The CBN yesterday announced that the 25 basis points hike is targeted at addressing rising inflation, which stood at 33.88 percent as of October 2024.
“The Central Bank is resolute and committed to continuing to fight the war against inflation and there is no going back on that.
“We are going to deploy everything in our arsenal to ensure that we are able to tame it. And of course, this entails the return to orthodox monetary policies,” Cardoso stated amid agitations of rising interest rates on the economy,” the CBN chief said.
According to him, the Committee was unanimous in its decision to further tighten policy, though members took a decision to retain the asymmetric corridor around the MPR at +500/-100 basis points; Cash Reserve Ratio of Deposit Money Banks at 50 percent and Merchant Banks at 16 percent; as well as the Liquidity Ratio at 30 percent.
He also said the MPC was particularly concerned that all inflationary measures also inched up on a month-on-month basis, suggesting the persistence of price pressures, with attendant adverse impacts on income and welfare of citizens.
Despite this, Cardoso believes that the current measures would be able to tame prices in coming months due to lag effect.
“It is important for people to understand that there is a time lag between when you implement policies and when they have an impact. That time lag can be anything up from six to nine months to even a year.
“Our own perspective is that we expect to see greater results in the first quarter of 2025.”
He said in addition, that the apex bank is working very assiduously with some of the relevant agencies to ensure that structural impediments to growth are handled appropriately.
He said the CBN will ensure that the foreign exchange market operates at its most optimal manner to reflect the true value of the currency.