LCCI
Raising interest rate ineffective to tame inflation, LCCI tells CBN
The Lagos Chamber of Commerce and Industry, LCCI, has dismissed use of monetary policy rate hike as an effective instrument in curbing rising inflation in Nigeria.
In a statement on Friday, LCCI’s Director General, Chinyere Almona, advised the Central Bank of Nigeria, CBN, to explore other viable options for addressing rising inflation.
The CBN had increased interest rates benchmark to 18 per cent from 17.5 per cent last month.
According to the apex bank, the move would tame inflation at 21.91 per cent in February.
But the LCCI’s boss disclosed that CBN’s effort would not reduce inflation.
She said: “While the CBN has the overarching mandate of ensuring price stability, we suggest it should not be done in a manner that compromises growth, especially in the face of high unemployment.
“Inflation chips away at purchasing power, leads to inventory stockpiles, undermines growth, and creates a lot of economic uncertainties. Taming it, however, should not be done at the expense of growth and the most vulnerable sectors.”
She said more than the instrumentality of monetary policy is needed to guarantee the desired results of low, stable, and predictable prices.
Also, economic experts had flawed the apex bank’s continued interest rates hike.