Olayemi Cardoso, Nigeria’s central bank governor, says the apex Bank remains committed to its core mandate of price and exchange rate stability in anchoring inflation.
Cardoso disclosed this in a communique issued on Tuesday at the end of the monetary policy committee meeting at the capital, Abuja.
The Abuja-based bank raised key interest rates for the sixth consecutive time by 25 basis points to 27.5 percent from 27.25 percent, intensifying its quest to rein in inflation and shore up its battered naira.
The decision becomes inevitable as prices soar, exacerbated by rise in food and core inflation, reflecting challenges of Africa’s most populous nation to provide affordable food and energy for its people.
“Members thus focused on the optimal policy choice to address the uptrend in price development, stabilize the exchange rate and anchor inflation expectations appropriately,” Cardoso said.
Read also: Nigerian Naira to end 2024 at 1,621.7/$ as pressure lingers
Data from the National Bureau of Statistics showed that headline inflation
(year-on-year) rose to 33.88 percent in October 2024, from 32.70 percent in September 2024.
On a month-on-month basis, it also rose to 2.64 percent in October 2024, from 2.52 per cent in the previous month, with both the food and core components contributing to the continued rise in headline inflation.
Food inflation rose further to 39.16 percent in October 2024, from 37.77 percent in September, while core inflation also rose to 28.37 percent in October 2024, from 27.43 percent in September.
Analysts are optimistic that inflationary pressures may begin to moderate in the first quarter of 2025 and keep to a downward trend on higher-for-longer MPR and due to base effect.
Read also: Rewane urges CBN to stabilise Naira, tame money growth
As prices cool, central bank is expected to kickstart its easing cycle, joining other economies who are gradually winning against inflation.
The CBN governor stated that the gross foreign reserves rose marginally to $40.88 billion as at 21st November 2024 from $40.06 billion at end-October 2024.
This recent accretion in the country’s reserves, if sustained, could bolster the Nigerian naira, giving it the firepower to strengthen against the greenback.
“Members reiterated their commitment to price stability as the bedrock of a thriving Nigerian economy,” Cardoso said.
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