NIGERIA HAS TO INCREASE INTEREST RATE TO TACKLE INFLATION, IMF INSISTS

The continual mopping up of excess liquidity from the economic system has contributed to high inflation in Nigeria.

Director of Communications in the Department of the International Monetary Fund (IMF), Julie Kozack said that was exactly what the Central Bank of Nigeria (CBN) has continued to do under its new leadership.

Kozack who spoke in Washington during a press conference at the headquarters of IMF stated that though interest rate hike has been postponed twice in 2023 by CBN, it was time to further hike it in the next Monetary Policy Committee.

“Inflation in Nigeria is running very high. It reached over 27 per cent in October, that is the year-on-year number.

"The Central bank, under its new leadership, has started to withdraw excess liquidity that was in the system contributing to high inflation.

“The next Monetary Policy Committee meeting should further raise the policy interest rate. So, the Central Bank is taking action to try to address the high inflation problem.” 

Commenting on the 2024 budget, Kozack said it: “aims to reduce the fiscal deficit while also creating space for these priority spendings, both on the social side and also on the development side.”