The Governor, Central Bank of Nigeria (CBN) , Mr Olayemi cardoso has supported the bank’s recent decision to increase its monetary Policy Rate to 27.25 per cent .
Following the press statement issued by the apex bank on Sunday, He cited that this decision taken , is a crucial step to tame inflation and eradicate excess flow cash.
Mr. Cardoso, while speaking at the Harvard Club of Nigeria, acknowledged that this decision would create an immediate hardships for loan recipients but its a necessity for ensuring the country’s economic well-being.
“Our decision to raise the Monetary Policy Rate to 27.25 per cent 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,”.
He outlined that the CBN prioritises it’s main goal to drive meaningful economic recovery which includes inflation management, reviving credibility, and fostering public trust in the financial system.
The CBN governor highlighted the Electronic Foreign Exchange Matching System as a significant initiative to boost transparency and market confidence.
“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,” .
Cardoso also addressed the issue surrounding the naira floatation policy as he explained that the move is aimed to harmonise
the official exchange rate with market force and curb speculations .
Despite not meeting its inflation goals, he remains hopeful, pointing to recent National Bureau of Statistics reports indicating a decline in inflation for July and August 2024 .
The CBN governor affirmed that the bank’s policies are progressively stabilizing the economy, despite existing challenges.
Eniola Jolaoso