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World Bank: CBN Monetary Policy Not Solution To Inflation
The World Bank has in its global economic prospects report stated that the CBN’s monetary policy tightening may not control inflation in Nigeria.
According to the report which was released by the Bretton Woods Institution, the risks of Nigeria’s economic growth is the failure of tightening policies on inflation.
The tightening of the monetary policy rate (MPR) is the increase of interest rate to control soaring inflation.
Interest rates in Nigeria have continue to rise especially since the resumption of monetary policy committee in 2024.
The rates have continually increased from 22.75 percent in February 2024 to 26.25 percent in May 2024. This explains a total increase of 750 basis points.
The world bank report reads, “risks to Nigeria’s growth outlook are substantial, including the possibility that the tightening of monetary policy stops short of reining in inflation”.
The World Bank is forecasting that growth will pick up this year in sub-Saharan Africa, although less robustly than previous projections.
However, the report had also predicted Nigeria’s economic growth rate outlook for the rest of 2024 and 2025 to remain the same.
