The Lagos Chamber of Commerce and Industries (LCCI) has said hiking interest rates or using monetary policy instruments alone will not lower high inflation rate.
It said there must be a corresponding boost to the supply side factors like forex scarcity, insecurity, rising cost of fuel and weak infrastructural support for production.
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Reacting to the interest rate increase by the Central Bank of Nigeria (CBN) this week, the Director General of LCCI, Dr Chinyere Almona, described the hike as a necessary option considering that most other economies were raising rates for the same reason of taming inflation.
The Monetary Policy Committee of CBN raised the Monetary Policy Rate (MPR) from 13 to 14 per cent in response to the surging inflation rate 18.60 per cent in June.
LCCI noted the gloomy outlook of the global economy, which it said had a direct link to the domestic economy with pass-through effects of imports.
She, therefore, urged the CBN to maintain its targeted intervention schemes for agriculture, manufacturing/industries, energy, infrastructure, healthcare, exports, Micro, Small, Medium and Small-Scale Enterprises (MSMEs) and other real sectors of the economy; emphasising that development finance loans should be targeted at MSMEs.
LCCI also said the Ukraine war and other disruptive factors might present as risks into the end of the year, adding that tightening the interest rate was a good step.
