The Governor of the Central Bank of Nigeria (CBN), Yemi Cardoso, has said that persistent inflation could prolong monetary tightening measures and hinder the nation’s growth potential.
He said in the foreword of the inaugural edition of the CBN’s Macroeconomic Outlook for Nigeria, recently released by the apex bank.
Based on this foreword, the central bank governor suggests that the apex bank could continue with its hawkish monetary policy, which is underpinned by higher interest rates, if inflation continues to rise.
He said: “The positive domestic outlook is, however, subject to certain risks, especially, as security challenges, supply-side shocks, and global geoeconomic fragmentation could aggravate inflationary pressures.
“Elevated inflation, due to long-standing structural imbalances, could extend monetary tightening and depress growth potentials.
“Oil theft, pipeline vandalism, and an unlikely decline in crude oil price could also constrain fiscal space, hamper foreign exchange receipts, lower accretion to the external reserves, heighten pressure in the foreign exchange market and undermine domestic stability.”
