The Central Bank of Nigeria (CBN) has declared that the monetary policy reforms put forward by its leadership have begun to have a positive impact on the economy.
The bank’s Director of, Corporate Communications Department, Isa AbdulMumin expressed this optimism in Abuja on Wednesday while speaking on the latest National Bureau of Statistics (NBS) figures.
According to AbdulMumin, the current inflation rate released by NBS indicated that the money market reforms by the apex bank are gradually affecting the economy.
Recall that NBS released its inflation statistics for October yesterday, with the headline inflation rate currently at 27.33%.
This was a 0.61% increase in headline inflation from the September inflation rate which stood at 26.72%.
The September inflation rate represented a 0.92 % point rise from the previous month’s 25.80%.
Speaking on the development, the director said the low increase in the average price level in October is an indication that the CBN’s monetary policy stance to tighten, as well as its money market reforms, were yielding the desired effect.
What the CBN is doing to curb Inflation
AbdulMumin noted that the leadership of the apex bank is working on its core mandate to stabilize the naira as well as reduce inflation.
According to him, the implementation of vigorous monetary tightening, utilizing various liquidity mechanisms, resulted in an increase in Open Buy Back (OBB) rates from under one per cent in August to their expected levels in line with the present monetary policy rate.
He said that such mechanisms included removing the cap on the Standing Deposit Facility (SDF) and Open Market Operations.
Despite the slight rise, he assured that the CBN is moving towards the intended goal of achieving price stability.
- “Available statistics showed that the first indication of deceleration in prices was recorded in September.
- “Further reforms in the money market, which commenced in October had accelerated easing in prices as indicated by the substantial drop in month-on-month changes recorded in October.
- “Moderation in month-on-month changes in prices observed in the headline, food and core components of the consumer basket followed reforms in the money market and relative stability in the FX market,” he said.
What You Should Know
Nairametrics reported that the CBN governor, Yemi Cardoso, reiterated his commitment to reduce inflation and stabilize the naira.
Cardoso said this is the core objective of the CBN, as the apex bank decided to focus more on advisory responsibility and withdraw from development financing.
The headline Inflation rate in October stood at 27.33% representing a 0.61% increase as opposed to the September rate which was a 0.92% increase from the previous month.
On a month-to-month basis, the core inflation rate for September 2023 was 2.22%, a slight increase from 2.18% in August 2023.
In October, however, the rate was 1.39%, showing a decrease of 0.83% from the September 2023 rate of 2.22%.
Although KPMG, a global advisory service firm, projected the country’s inflation rate to hit a 30% threshold by December, the CBN maintained that the slow increase of inflation in October is an early indicator that things might be turning in a positive direction for the economy.
