Dealers in the financial markets have advised the Central Bank of Nigeria (CBN) on the need to keep inflation within target rate.
National Bureau of Statistics (NBS) report showed that inflation was not at 20.09 per cent for October, which is 17-year high.
Rising in energy prices, such as rising price of Automotive Gas Oil (AGO), increase in electricity tariff and intermittent scarcity of Premium Motor Spirit (PMS) are said to have contributed significantly to rising inflation expectations.
The CBN policy plan was to keep inflation within six to nine per cent band, but inflation for October stood at 21.09 per cent.
It was on this note that members of the Financial Markets Dealers Association of Nigeria (FMDA) comprising of bankers, regulatory institutions, non-bank financial institutions advised the apex bank to bring down inflation rates to tolerable and target levels and curtail foreign exchange rate volatility.
“The need to note that financial markets only do not help economic growth but collective decision of the political and economic leaders of a nation creates desired growth. The relevance of the global Gross Domestic Product and global population on economic policies and its impact on economic growth needs to be studied by all financial market participants,” the group said in a communique issued at the end of its annual conference in Lagos.
According to FMDA, financial sector regulators need to follow the multidimensional index to assess the quality of Monetary Policy Framework via the Accountability, Independence, Policy Operational Strategy and Communications (AIPOC). The group highlighted the role of financial markets from the monetary point of view, International Monetary Funds function as a driver of fiscal policies and the influence of monetary pricing to economic growth. It called for active collaboration between the Central Bank of Nigeria and the market in ultimately instituting a rule-based regulatory framework for sustainable domestic growth.