Financial analysts have said that pure monetary policy will not sustain the inflation rate at a single digit as desired by the Central Bank of Nigeria.
The Managing Director, Civic Investment Limited, Mr. Thomas Adenuga, told our correspondent in an interview that high inflation rate in the country was beyond the CBN.
He said, “The CBN’s single digit inflation target has been a difficult task. The cause of high inflation in Nigeria is not only inside monetary aggregates. Thus, pure monetary policy may not bring down inflation.”
The Chief Executive Officer, Dulex Financial Company, Mr. Chris Korie, said the achievement of stable prices via a single digit inflation rate informed the maintenance of restrictive monetary policy by the CBN in 2012.
“Though the CBN maintained the benchmark rate of 12 per cent in 2012, the general policy thrust of the bank has been non-accommodative,” it added.
He pointed out that the monetary authorities should look beyond monetary policy, adding, “there is the need to collaborate with the fiscal authorities to combat inflation. Tackling high inflation rate or sustaining single digit inflation is not only a monetary issue.”
The CBN has overtime stressed the need to maintain a single-digit inflation rate.
A marginal increase was recorded in the nation’s inflation rate in February, as figures released by the National Bureau of Statistics on Friday put the current inflation rate at 9.5 per cent as against 9.1 per cent declared in January.
The single-digit inflation figure recorded in January had fuelled speculations that the CBN could lower the Monetary Policy Rate, which some private sector players described as punitive.
Market watchers had called for lowering of the MPR given the positive signals from the NBS and the growing trend of the external reserves, which hit $48bn last week.
The Monetary Policy Committee has kept its benchmark interest rate at a record 12 per cent for eight consecutive meetings to curb prices and support the naira.
Inflation eased below 10 per cent, meeting the CBN’s target, in January after a jump in fuel prices in the same month last year fell out of the calculation.
The Governor, CBN, Mr. Lamido Sanusi, said on January 25 it would be “very difficult” to keep it at that rate for the rest of the year.