WorldStage Newsonline– The Central Bank of Nigeria (CBN) Governor, Yemi Cardoso has blamed the tremendous amount of liquidity in the system within a short time for the rising inflation in the country.
Speaking at the 296th Monterey Policy Committee (MPC), CBN Governor, Yemi Cardoso, said when you print money on ways and means it has its consequences, and we are paying for those consequences right now, unfortunately, unfortunately, we all witnessed a situation where money supply trajectory got out of hand.”
The MPC had on Tuesday raised the country’s baseline interest rate by another 50 basis points to 26.75 per cent while adjusted the asymmetric corridor around the MPR to +500/-100 from +100/-300 basis points; and retained the Cash Reserve Ratio (CRR) of commercial banks at 45 per cent.
Cardoso explained that despite the rising inflationary impact on the economy, it will take necessary measures to bring the nation’s rising inflation under control.
He admitted that inflation was really and truly having a major impact on our economy as purchasing power was getting eroded, people were being pushed into different categories of poverty.
“And it is in their own interest that we are able to tame the scourge of inflation. If not, the ramifications will also be for them. It’s not on the average man, you know, it’s also before them. And we understand the need for growth,” he said.
“And we also understand that it is relatively challenging. When you have high interest rates, we also understand that, and quite frankly, my belief is that it is so fundamental to the long term future, and stability of our economy, that inflation should be brought under control that in the short term, these are pains, which ultimately will be able to help our economy and help the manufacturing businesses as well.”
Reflecting on how we got to where we are, he said, “And let’s not forget that this was largely as a result of a tremendous amount of liquidity that came into the system in a relatively short space of time. Okay, when you print money on ways and means it has its consequences, and we are paying for those consequences right now, unfortunately, unfortunately, we all witnessed a situation where money supply trajectory got out of hand.”
On the recent CBN policy on dormant account, the apex bank, said the policy doesn’t include domiciliary account.
“The policy is to prevent fraud, whereby people identity are copied and trying to get the system to grab hold of your money,” he said.
“The policy, and the directive is meant to ensure that all those monies come to the center bank for safekeeping, you don’t lose your money. And it has zero cost to the beneficiaries. All that will happen is that a central bank will manage the monies within our possession. And when the rightful owner surfaces, the money is returned, plus whatever income is accrued to you.
“And I think this should be a welcome development, even from the naysayers, because at a time like this, we recognize the fact that every party needs every single penny, that belongs to them, to accrue to them, and not having a situation where you’re, you’re putting money in a particular place, and essentially end up losing it, of course, it will create liquidity within the system as well.”
