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Feyisayo Popoola
Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele, said that the nation could see a reversal of the fall in the inflation rate if the risks that threaten favorable macroeconomic conditions are not taken into account
. a statement from the May 21-22 monetary policy committee meeting and members' personal statements, which were released Monday, Emefiele, who is the eight-man MPC chairman, has identified the current budget of over N9tn, The rise in interest rates expected from the US Federal Reserve could pose a threat to the Nigerian economy.
According to him, inflation is falling but remains high and out of acceptable range, with a likely risk of recovery in the short term.
He described the desire that exchange rate stability, low inflation and low interest rates are not compatible because of the structural realities of the economy. 9003] Emefiele said: "For some badysts, the observed moderation in the inflation rate warrants a policy of ease, however, the prevailing realities, especially double-digit inflation and high expectations of inflation, are not easy. Short-term inflation, do not support it
"While the trend towards disinflation is encouraging, the observed moderation in inflationary pressure is jeopardized by the base effects and liquidity injections expected in the second half of the year. It is therefore imperative to ensure that the path of disinflation is not reversed. "
The Governor of the CBN has stated that his immediate predisposition would be to tighten the domestic policy stance to contain the expected inflation and ensure the stability of the foreign exchange market
The Deputy Governor , Corporate Services, CBN, and MPC member Edward Adamu, said it was necessary to create buffers both on a fiscal and monetary level in anticipation of a possible economic slowdown [19659003Theoutlookforinflationfortherestoftheyearappearedveryuncertainduetothelikelyincreaseindomesticliquidityresultingmainlyfromtaxinjectionsandexpectedelectionexpenses
Adamu said: "The vote of 2018 promulgated by the National Assembly promises to be very expansionary because a significant part of the budget should be financed by the deficit.
"In addition, the payment of the entrepreneur's debts and the prospects of a new minimum wage, further complicates a little the domestic liquidity prospects.When these probable tax injections are taken into account, the resulting inflation prospects become more frightening.
"Therefore, from the point of view of financial stability, inflationary threats or risks to the stability of the exchange rate must be mitigated"
Aishah Ahmad, Deputy Governor, Stability of the Financial System, said: "The continued implementation of the 2017 budget, the substantial implementation of the 2018 federal budget in a limited time frame, and the 2019 election season, which has historically had an inflationary impact, is a potential risk for the positive trend of inflation. "
She described the positive trajectory of key economic variables such as growth, inflation, and exchange rates as gratifying – to be paid for new threats to earnings, whether in the form of". a potential trade war between China and the United States, inflationary fiscal shocks or reversals of flows, and, according to her, a new easing of monetary policy is not out of place to maintain vigilance.
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