There’s no magic wand in combating inflation – Cardoso

Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has said the measures and policies in tackling inflation would take time to bring desirable results.

Cardoso said this even as the CBN raised its benchmark interest rate, the Monetary Policy Rate by 150 basis points from 24.75 percent to 26.25 percent which was the third time in less than three months.

Affirming that there is no magic wand in combating inflation, the CBN chief said another challenge confronting the country is the rising costs of transportation of farm produce, after achieving moderate food inflation.

Cardoso disclosed this while briefing journalists at the end of the Monetary Policy Committee, MPC, meeting in Abuja.

However, despite increasing its MPR, the apex bank retained the Cash Reserve Ratio for deposit money banks at 45 percent and the Liquidity Ratio at 30 percent.

Cardoso expressed optimism that the various mechanisms implemented by the CBN to curb inflation and create a stable foreign exchange market would yield the needed results in the coming months.

He stated, “I have said several times and I will say again, there is no magic wand. These are things that need to take their time.

“I am pleased and confident that we are beginning to get some relief and in another couple of months we will see the more positive outcomes from the Central Bank have been doing.

“The committee thus reiterated several challenges confronting the effective moderation of food inflation to include rising costs of transportation of farm produce, infrastructure-related constraints along the line of distribution network, security challenges in some food producing areas, and exchange rate pass-through to domestic prices for imported food items.

“The MPC urged that more be done to address the security of farming communities to guarantee improved food production in these areas.

“Members further observed the recent volatility in the foreign exchange market, attributing this to seasonal demand, a reflection of the interplay between demand and supply in a freely functioning market system.”

Cardoso spoke about other important aspects of the economy like wooing foreign investors and regulating fintech companies for Nigeria to have a revitalised economy.

On achieving recapitalisation for the Nigerian banking system, he said, “It’s our responsibility to ensure it remains sound, safe, and fit for purpose. We are not putting any of the banks under pressure regarding recapitalisation.”