By Adedapo Adesanya
The Governor of the Central Bank of Nigeria (CBN), Mr Yemi Cardoso, has warned that recent policies of the federal government to import specific staple foods may hamper current growths on the local front.
The CBN Governor said this after the apex bank’s 296th Monetary Policy Committee (MPC) meeting in Abuja on Tuesday, where it again raised the Monetary Policy Rate (MPR), which measures interest rates, by 50 basis points, from 26.25 per cent to 26.75 per cent to tame inflation.
This came amid soaring inflation, which hit 34.19 per cent in June.
The MPC also pegged the Cash Reserve Ratio (CRR) for Deposit Money Banks at 45 per cent while that of merchant banks was put at 14 per cent and the liquidity ratio was pegged at 30 per cent.
Recall that the FG had paused import bills for six months on staples such as rice, maize, and wheat to help stem the rising food inflation.
The apex bank governor warned that the timeline should be followed so as not to stifle the gains made in local food production.
Speaking on the reason for the 50-basis point hike, Mr Cardoso, who doubles as the Chairman of the MPC, noted recent events in the economy, such as inflation and the need to stabilize the foreign exchange market, was the rationale for the increase.
Also, Mr Cardoso praised the convergence between the official exchange rate and that of the parallel market as part of efforts to reduce arbitrage in that sector.
The fresh hike means the apex bank has increased the rates by 800 basis points this year from 18.75 per cent last year.
Mr Cardoso had in recent weeks signalled that the bank would continue to use tools such as rate hikes to fight the country’s high inflation, which has risen for the last 18 consecutive months.
Analysts have warned that the headline inflation over the last four months indicated that the CBN’s tightening measures were permeating the economy but warned that there might be side effects.