CBN Not Ready to Ease Monetary Policy as Inflation Remains High — Victor Oboh

The Director of the Monetary Policy Department at the Central Bank of Nigeria (CBN), Victor Oboh, has said the apex bank is not in a hurry to ease its monetary policy stance, insisting that inflation remains too high to warrant a reduction in interest rates.

Oboh made the remarks during a live interview on TVC Business Nigeria, where he explained the rationale behind the Monetary Policy Committee’s (MPC) decision to retain the Monetary Policy Rate (MPR) at 26.5 per cent.

According to him, inflation is a major concern not only for businesses and households but also for the Central Bank, whose primary mandate is to maintain price stability through low and stable inflation.

“Inflation is not just a concern for businesses and households. It is also a concern for the MPC and the central banking community because the essence of central banking is to achieve low and stable inflation. High inflation is a loss for everyone and is detrimental to every economic stakeholder,” Oboh said.

He noted that the MPC carried out extensive analysis of the factors driving inflation before deciding to leave interest rates unchanged.

Oboh said the committee deliberately refrained from easing monetary policy because doing so prematurely could undermine the progress already made in the fight against inflation.

“The bank is not comfortable with the current level of inflation, and that is the main reason why it is not in a hurry to ease policy. Easing would mean you are relaxing the fight against inflation,” he stated.

The CBN official explained that Nigeria’s disinflation trend was temporarily interrupted over the past three months but expressed optimism that the country had resumed its path toward lower inflation after recording a slight moderation in June.

“If not for the interruption to the disinflationary trend three months ago, we would have recorded greater progress in moderating inflation. However, the marginal decline recorded in June reinforces our hope that we may have resumed the disinflationary path, all things being equal,” he said.

Oboh said maintaining the policy rate at 26.5 per cent would allow previous monetary tightening measures sufficient time to work through the economy and further reduce inflationary pressures.

He added that monetary policy actions typically take time before their full effects are reflected in inflation data.

The Monetary Policy Director also expressed optimism that food prices would decline as the harvest season progresses, noting that food inflation has remained one of the biggest contributors to headline inflation.

He further disclosed that the Central Bank is collaborating with fiscal authorities to address supply-side constraints that continue to fuel inflation.

According to him, improved coordination between monetary and fiscal authorities will help tackle production and distribution bottlenecks, accelerate the decline in inflation, and support macroeconomic stability.