Nigeria’s Central Bank unveils inflation template to guard against soaring prices

Yemi Cardoso, Nigeria’s Central Bank Governor, has unveiled a template to guard against soaring inflation that jumped for the tenth consecutive time in October 2023. The framework of the bank will ensure transparency, and maintain effective communication with the public regarding instances of price control and hikes, according to the apex bank’s chief.

Cardoso made this announcement at the Chartered Institute of Bankers annual dinner on Friday in Lagos. Having recently postponed the second crucial rate meeting since July, he stated that the Central Bank of Nigeria (CBN) had met its quota of rate meetings for the year 2023, even as inflation hit an 18-year high of 27% in October

. KPMG predicted that Nigeria’s headline inflation will hit 30% by December 2023.

Analysts have anticipated this meeting hoping to make investment decisions following what they would hear at the dinner. They also anticipated a rise in interest rates this month to help slow down inflation and protect banks from losing capital as inflation continues to rise. Cardoso did not state when the first rate hike meeting for 2024 will be held under his leadership. The governor also said that the bank had initiated foreign exchange frameworks to address the backlog of dollar demand that has weighed heavily on the naira. He said the payment of obligations will continue until they are completely cleared.

The 66-year-old former Citibank executive directed that the banks’ minimum capital ratios be increased instead, in the hopes of meeting the $1 trillion target set by the Federal Government.

Despite acknowledging the importance of technology in payments, Cardoso promised to checkmate the sector as some payment firms had been operating outside the activities approved for their licenses. The bank chief said that CBN has been mopping excess liquidity in the market via the introduction of Open Market Operation (OMO) bills. He also assured that the bank would no longer stray from its core mandate but work towards providing the right fiscal and monetary policies that would steer the nation forward.