According to economists, the Central Bank of Nigeria’s cash swaps and other policies may limit demand, which would lower inflation in January.

They pointed out that the apex bank’s implementation of cashless policies and currency redesign may not have a lasting impact on the nation’s inflation rate.

Segun Ajibola, a professor of economics at Babcock University and a former president of the Chartered Institute of Bankers of Nigeria, stated that the pressure on the populace may cause them to reduce their demand, which would temporarily slow the inflation rate, in an interview with The PUNCH.

However, he cautioned that until the true issues were resolved, the effect might only be temporary.

“There is what we used to call demand-pull inflation,” he said. A cost-push is present. Producers, manufacturers, and other owners of production assets who conduct business and sell to the market like farmers are the ones who drive up costs.

He claimed that due to pressure and other factors, people were largely unable to meet demand. Cash swaps may also lessen demand power.

“People naturally should have demanded some things,” Ajibola continued. There is an unintentional decline in demand.

“The pressure on consumers is so great that the inflation rate may very well be significantly impacted. If it does, it will only last a short while. We will then be back to the reality of our economy once the economy has recovered from the shock of these CBN policies.

Bongo Adi, a different economics professor at the Lagos Business School, observed that the government had pressured Nigerians so hard that there was a reduction in spending, which decreased aggregate demand in January.

Although the rate of inflation has decreased in places like the US, he added, “Not necessarily as a result of this hawkish monetary policy stance.

“Consumer spending has not yet reached the elastic limit, which is why. There is no other option for consumers now that they have reached the bottom of the food chain than to reduce their spending.

“Aggregate demand starts to decline as spending is reduced. As demand declines, prices start to decrease. This isn’t due to a shortage of money; rather, it’s because people can’t spend money they don’t have.

“Since people aren’t spending a lot of money this month—January—I expect inflation to start to decline.

When it declines this month, demand will be weaker than expected rather than the CBN’s monetary policy, according to this statement.