MPC Ponders New Policy Direction As Inflation Threat Shadows July Meeting

The Governor, Central Bank of Nigeria (CBN), Mr Godwin Emefiele, has said that the Monetary Policy Committee will chart a new course for an improved monetary policy and Central Bank of Nigeria (CBN) that will provide direction for monetary policy in Nigeria.

The governor said this at a Monetary Policy Committee (MPC) Strategic Retreat in Lakowe, Ibeju-Lekki in Lagos at the weekend.

GreenWhiteGreen GWG reports that he spoke ahead of Monday’s MPC meeting where the committee is expected to ponder the options on monetary policy rates in the wake of rising inflation.

The Consumer Price Index (CPI), which measures the rate of change in prices of goods and services, maintained its upward trajectory to 18.60 per cent year-on-year in June, compared to 17.75 per cent in the corresponding month of 2021, the National Bureau of Statistics (NBS).

That was the highest rate of inflation since January 2017 month-on-month.

The MPC had at its last meeting in May had raised the Monetary Policy Rate (MPR) by 150 basis points to 13 per cent in response to the inflationary pressures, the first time that the committee would raise the benchmark rate in about two and half years.

With the inflationary pressures still surging the MPC and the economy also trying to rise from the doldrums GreenWhiteGreen GWG reports that the MPC would be at a crossroads on how to navigate the delicate balance before it.

Meanwhile, at the retreat last Friday, Governor Emefiele said that technology and innovation were playing major roles in output growth and economic development in Nigeria, hence the need to explore new ways of adapting monetary policy tools to improving the contribution of technology and innovations to the growth equation.

He said that monetary policy had been severely challenged, as its policy space narrowed significantly, in some cases, paradoxically and necessitating the need to rethink monetary policy in the context of emerging challenges and economic transformation.

The governor also said that the apex bank had championed the financial inclusion principle to achieve the Sustainable Development Goals (SDGs), including the recent launch of the eNaira.

He said that since its launch, a large unbanked populace had been captured into the formal sectors, saying that it had also improved monetary policy efficiency and positive impact on the better standard of living for the population.

NAN reports that global experts and colleague governors from other central banks, including the International Monetary Fund (IMF), Bank for International Settlements (BIS), Bank of Kenya and private sector players were present at the meeting.

Members will share their experiences and thoughts on emerging issues with the objective of collating some well thought-out and implementable measures to address the impacts of digitalisation on the Nigeria economy. (NAN)

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