An economist, Prof. Sheriffadeen Tella, on Thursday called on the Central Bank of Nigeria (CBN) to ease its monetary policy and stabilise the exchange rate to stem the nation’s rising inflation.
Tella, who works at the Department of Economics, Olabisi Onabanjo University, Ago-Iwoye, Ogun, gave the advice in an interview with the News Agency of Nigeria (NAN) in Lagos.
NAN reports that Tella was reacting to the January inflation figure, which rose by 0.17 point and 0.92 per cent.
According to the data released by the National Bureau of Statistics (NBS) on Feb. 15, the inflation rose from 18.55 per cent posted in December to 18.72 per cent in January.
The increase of 0.92 per cent growth when compared with the December figure was driven by the surge in food, transport and electricity prices.
The statistics office added that a separate food index also rose to 17.82 per cent from 17.39 per cent in December.
Tella said that high interest rate and the continuous depreciation of the naira had led to persistent rise in inflation.
“I never expected the inflationary rate to fall given the persistent high cost of production fuelled by high interest rate, continuous depreciation of the naira and tight money policy.
“These policies have negative effects on production of goods locally and high cost of imported goods.
“Though, demand itself is constrained, people have diverted spending to foods and medicine resulting in high prices of both.
“If you look at what drives inflation during the reported time you will see the roles of these two sub-sectors.
“The CBN should ease monetary policy and stabilise the exchange rate in the first instance to enable it to appreciate,” Tella said.
He advised the apex bank to change the colour of the naira’s high denominations to stop speculative attack and take care of the fake notes in circulation. (NAN)