Inflation to Reduce in Coming Months – Cardoso
The Governor of the Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso, has expressed optimism that with the measures in place, core and headline inflation will come down in the coming months.
He also disclosed a new strategy to double diaspora remittances.
The CBN Governor spoke while fielding questions from journalists following the Monetary Policy Committee (MPC) meeting held on Monday and Tuesday in Abuja.
Economic Confidential earlier reported that the apex bank raised the monetary policy rate (MPR), a benchmark interest rate, from 24.75 percent to 26.25 percent after the meeting.
While acknowledging rising inflation figures over the past year, Governor Cardoso expressed confidence that the Central Bank’s tools are working and will bring further relief in the coming months.
He said: “Yes, inflation has been increasing, which is concerning. However, there are signs of moderation, particularly in core and headline inflation. These measures require time to fully manifest but are beginning to show positive results. We expect to see more favourable outcomes in the coming months.”
Addressing the banking sector, the Governor reassured the public of the system’s strength and highlighted ongoing recapitalisation efforts aimed at bolstering its resilience, especially considering the government’s goal of a one-trillion-dollar economy.
“The banking system is sound and safe. The Central Bank is focused on ensuring that banks have sufficient shock absorbers to withstand domestic and international uncertainties. We are working with banks on recapitalisation and expect the programme to be completed within two years,” the Governor explained.
Cardoso also addressed the recent controversy surrounding cybersecurity levies. He explained that the cybersecurity levy originated from the Cybercrime Act of 2015 and 2024. However, he clarified that the Central Bank was simply implementing a law passed by the National Assembly since 2015. He added that the levies have been withdrawn following the government’s revised position.
“As bankers to the government, we were implementing a law that had been enacted. However, following feedback, we have withdrawn the circular issued to the banks,” he noted.
The apex bank governor further elaborated on the bank’s strategy to double remittances from the diaspora, which is estimated to represent about 6% of Nigeria’s GDP.
“We have engaged with international financial institutions to address challenges and encourage the use of official channels. A task force has been established to oversee this initiative, aiming to enhance foreign currency flows and reduce transaction costs,” he added.
Responding to questions about the fintech sector, the Governor dismissed claims of exceptional treatment or license revocations. He noted the importance of regulation in a rapidly growing sector to prevent illicit financial flows and money laundering.
He assured the public that the bank is not revoking licenses but rather strengthening regulations to benefit the public. The Governor highlighted ongoing dialogue with fintech companies to improve regulatory frameworks and ensure robust compliance measures.
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