cbn statement, 2023-05-24
The MPC therefore opted to tighten, though moderately, so as to: i. indicate the MPC’s conviction that the current policy stance is moderating the rising inflation, albeit month-on-month, and sustaining the stance would consolidate the gains made so far; ii. support the efforts toward moderating the demand-pull inflation, as cost of funds increases, and discourages further build-up in aggregate demand, in the face of declining output growth; iii. narrow the negative real interest rate gap and moderate the associated consequences, including discouraging domestic savings mobilization and waning investors confidence; iv. effectively moderate the monetary phenomenon in the current drivers of inflation by tapering both economic and financial conditions and sweep-up excess liquidity in the system; and v. boost the Bank and Committee’s credibility following its earlier forward guidance to continue to tighten when confronted with unabated rising inflation.
Sentiment: neutral
Topic: mp_interest_rate