CBN Optimistic of Policy Effectiveness Despite Inflation Rise
By Patience Ikpeme
The Central Bank of Nigeria (CBN) has expressed optimism that its monetary policies are effectively controlling inflation despite the increase in the headline inflation rate from 26.72% in September 2023 to 27.33% in October 2023.
In a review of the latest inflation figures, CBN Director of Corporate Communications Dr. Isa AbdulMumin noted that the month-on-month inflation rate in October 2023 was 1.73%, 0.37% lower than the rate recorded in September 2023.
AbdulMumin attributed this decline to the CBN’s aggressive monetary tightening measures, including removing the cap on the Standing Deposit Facility (SDF) and Open Market Operations (OMO), which raised Open Buy Back (OBB) rates from less than 1% in August to around the monetary policy rate.
According to Dr AbdulMumin, these measures have led to a moderation in month-on-month changes in prices observed in the headline, food, and core components of the consumer basket. He expressed confidence that the CBN is headed in the right direction in terms of achieving price stability.
“Available statistics showed that the first indication of deceleration in prices was recorded in September and 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,” Mumin explained.
Despite the October inflation increase, the CBN spokesman remained optimistic that the CBN’s policies are working. He noted that the 0.61% increase was lower than the 1.64% increase recorded between August and September, indicating a slowing trend in inflation.
The CBN’s commitment to controlling inflation is evident in its recent policy actions. The bank’s stance on monetary policy is expected to remain tight in the coming months as it continues to strive for price stability.
