Raising interest rate to tame inflation ineffective – LCCI tells CBN

The Lagos Chamber of Commerce and Industry, LCCI, has disclosed that the monetary policy rate hike is ineffective in curbing rising inflation in Nigeria.

In a statement on Friday, LCCI’s Director General, Chinyere Almona, urged the Central Bank of Nigeria to explore other viable options for addressing rising inflation.

CBN announced an interest rates benchmark of 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.”

It further said that more than the instrumentality of monetary policy is needed to guarantee the desired results of low, stable, and predictable prices.

Media Talk Africa had reported that economic experts flawed the apex bank’s continued interest rates hike.