The Governor of the Central Bank of Nigeria, CBN, Olayemi Cardoso, has said the huge purchases of food items by the government as palliatives for distribution to vulnerable citizens is a contributor to the galloping food inflation in the country.

Cardoso made this disclosure in his contributions during the March Monetary Policy Committee meeting, which was published on the CBN website on Monday.

At the meeting, the Monetary Policy Committees, MPC raised the benchmark interest rate to 24.75 percent from 22.75 percent, which it said was aimed at tackling inflation.

The Consumer Price Index report released by the Nigerian Bureau of Statistics, NBS, in April, stated that the country’s inflation rate increased to 33.2 per cent in March.

The food inflation rate also reached 40.01 per cent, with a year-on-year increase of 15.56 percentage points from 24.45 per cent in March 2023.

According to the CBN governor, inflationary pressure had failed to abate despite notable stability in the foreign exchange market.

He said, “Despite notable stability in the foreign exchange market resulting from decisions taken at that 293rd MPC meeting, inflationary pressure remains unabated. While there is the argument that the significant tightening since the last MPC meeting is yet to fully permeate the system and yield its expected impact, the risk of galloping inflation persists.

“If such a hyperinflationary scenario is to become reality, available options to control inflation could be severely constrained. From the facts presented to the MPC, there is a clear indication that the monetary factors contributing to inflation are diminishing in their significance.

“This could be considered as evidence of the impact of decisions reached at the 293rd MPC meeting. Staff reports show that the principal drivers of acceleration in inflation are hikes in food and energy prices which are associated with structural factors,” he added.