In the face of economic and financial challenges, members of the rate-fixing arm of the Central Bank of Nigeria (CBN), the Monetary Policy Committee (MPC), will face strong choices in the next two days as the sustained inflationary tension remains a major challenge for the apex bank.
It will be the second interest rate hike in two months if the most likely choice scales the voting obstacle as the MPC commences its 286th meeting.
The MPC is boxed in between expressing its independence or jumping on the bandwagon of hawks, who are tossing everything into the ring to restrain surging inflation.
The Consumer Price Index (CPI), which measures the rate of change in prices of goods and services, conserved its upward trajectory to 18.60 percent year-on-year in June, compared to 17.75 percent in the related month of 2021, according to the National Bureau of Statistics (NBS).
This is the highest rate of change in prices reported since January 2017 month-on-month, the headline inflation rate also strengthened to 1.82 percent in June and 1.78 percent in May.
The rising inflation offers a significant challenge to the CBN, in particular, which had hoped to contain the index within the six percent to nine percent band.
As the MPC meets, pundits said inflation was likely to top its agenda following the current commodities supply gaps in the global economy, occasioned primarily by the war between Russia and Ukraine, which had sent energy prices to the ceiling.
CBN Governor and Chairman of the committee, Godwin Emefiele, had told the apex bank, with about 150 staffers holding Ph.D. degrees in different fields of economics, does not lack the intellectual capacity and expertise to innovate an unconventional policy push to rescue the economy.
But experts are worried that monetary procedures, which are essentially short-term, may have been compelled by the decline of fiscal authority and mounting recklessness in the political space.