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LCCI Urges CBN to Pause Interest Rate Hikes Amid 25.8% Inflation

The Lagos Chamber of Commerce and Industry (LCCI) has called on the Central Bank of Nigeria (CBN) to pause further interest rate hikes to ease pressures affecting inflation, which hit 25.8% in August 2023.

In a statement on Monday, LCCI Director-General Dr. Chinyere Almona reacted to the latest inflation data, noting businesses are expected to adopt cost-cutting strategies like downsizing and local sourcing to manage rising costs.

Almona said the LCCI is concerned about the uptick in food and core inflation and unclear near-term price trends. She recommended the federal government implement prudent fiscal policies, especially on borrowing, and remove taxes on basic food items to protect vulnerable Nigerians.

The business lobby group also called for palliatives to cushion inflation’s impact on consumers and a pause on CBN rate hikes:

“We implore the government to hasten the provision of the anticipated palliatives to lessen the impact of the rising trend in prices on economic agents. Furthermore, we urge the CBN to pause interest rate hikes to relieve the pressures on the supply side, especially at this time.”

Inflation rose to 25.8% year-on-year in August 2023, up 1.72% from 24.08% in July. Food was the top contributor, followed by housing and clothing.

Urban inflation hit 27.69% versus 20.95% in August 2022. Rural inflation reached 24.10% against 20.12% last year.

In July, the CBN raised its benchmark interest rate to 18.75%, the highest in 22 years, to tackle inflation.

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