The Governor of Central Bank of Nigeria (CBN) Olayemi Cardoso has said the Monetary Policy Committee raised the country’s interest to 27.25 percent to curb inflation and to control excess money in circulation.
This was announced in a statement issued by the apex bank on Sunday, 6 September, 2024
Cardoso described the decision to raise interest rates as a necessary move to control inflation and curb excess money in circulation.
The CBN boss, who spoke at the Harvard Club of Nigeria over the weekend, stressed that the rate hike, while difficult on borrowers, is crucial for the country’s economic stability.
“Our decision to raise the Monetary Policy Rate to 27.25 percent was a bold move. Higher interest rates, while painful for borrowers, are necessary to curb excess money in circulation and control inflation. Leadership is about making hard choices to secure long-term stability over short-term comfort in moments like these,” Cardoso said.
According to him, trust building was the reason the apex bank recently introduced the Electronic Foreign Exchange Matching System.
“Trust is the currency of central banking. If the public loses trust in the institution, the efficacy of its policies diminishes. Our decision to implement the Electronic Foreign Exchange Matching System is rooted in this understanding.
“By enhancing transparency and providing more accurate oversight of forex transactions, we send a strong signal that the CBN is serious about fair and efficient markets,” he said.
This comes as Nigeria’s inflation stood at 32.15 percent in August.
Though inflation had declined twice in recent months, the prices of goods and services have remained high.
