As the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) meets for the third time this year, key monetary policy issues are expected to dominate discussions amid the high inflation rate.
The two-day meeting began on Monday in Abuja and is expected to be chaired by Mr Emefiele, who was recently accused of seeking study leave “in a bid to evade rendering accounts”.
The CBN governor has been in the eye of the storm in recent months as Nigerians battled the ripple effect of the controversial Naira redesigning policy that plunged millions of Nigerians and businesses into hardship.
Mr Emefiele’s troubles also faced pressure from the operatives of the State Security Service (SSS), who sought to arrest him over corruption and terrorism financing allegations.
As the MPC meets today, the apex bank is expected to deliberate on critical issues, including inflationary pressure, interest rate and forex scarcity.
Last week, the annual inflation rate of Africa’s largest economy rose to 22.22 per cent in April from 22.04 per cent in the previous month. The National Bureau of Statistics (NBS) said the April 2023 inflation rate increased by 0.18 per cent compared to the March 2023 headline inflation rate.
The lingering inflationary pressure in Nigeria prompted the apex bank to hike interest rates to their highest levels in nearly two decades.
In March, in an aggressive move to contain the nation’s inflationary pressure, the CBN raised its benchmark lending rate to 18 per cent. This, alongside slow economic growth and a high unemployment rate, are some challenges bedevilling Africa’s most populous country as a new president prepares to assume power later this month.
In its recent inflation report, the NBS reported that Food & non-alcoholic beverages (11.51 per cent), housing, water, electricity, gas & other fuel (3.72 per cent), clothing & footwear (1.70 per cent), transport (1.45 per cent) contributed to the CPI.
Others are furnishings & household equipment & maintenance (1.12 per cent), education (0.88 per cent), health (0.67 per cent), miscellaneous goods & services (0.37 per cent), restaurant & hotels (0.27 per cent), alcoholic beverages, tobacco & kola (0.24 per cent), recreation & culture (0.15 per cent) and communication (0.15 per cent).
In January, the MPC raised its benchmark lending rate from 16.5 per cent to 17.5 per cent in a sustained push to control inflation and ease pressure on the naira.
Similarly, the CBN, during the last MPC in March, raised its benchmark lending rate to 18 per cent in an aggressive push to contain the nation’s inflationary pressure.
As the MPC makes its pronouncements Tuesday, these and numerous other monetary policy issues are expected to be addressed at the meeting.