Olayemi Cardoso, the new governor of the Central Bank of Nigeria (CBN) has outlined plans to tackle the persistent issue of rising inflation in Nigeria.
Cardoso stated that he aimed to implement evidence-based monetary policies to address the rising inflation rate, which was among the highest in Africa.
One of the key factors contributing to the rising inflation rate, he mentioned, was the money supply and deficit financing.
The new CBN Governor promised to stabilize the foreign exchange market and address the challenges posed by the double-digit interest rate.
According to checks, Nigeria was grappling with an 18-year high inflation rate of 25.8 percent as of August 2023.
Speaking during his screening session of members of the Senate on Tuesday, September 26, he said:
“On the issue of inflation and the price of goods, the jury is out, some people will say structure, some others will say it is money supply issue. Truth is, it is a combination of both.
“When you look at the dimension of inflation, we will be doing evidence-based monetary policy. We shall not be making decisions based on a whim.
“We will significantly rebound the infrastructural demand with respect to ensuring that our data gathering capacity is enhanced so we can make decisions based on proper data.
“Reliable studies have shown that in the past 10 to 15 years at least 50 per cent of inflation has been as a result of money supply and deficit financing.
“This is a big problem at least it certainly has been over a period of time and it’s something we have to face frontally.
“Going forward from the Central Bank of Nigeria, we will do everything possible to ensure that we work closely with the fiscal side and ensure that the issue of deficit financing does not become a problem to us. We cannot afford to have the big challenges from fiscal deficit financing.”
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