Cardoso, CBN Governor, Predicts Lower Interest Rates – Stay Informed
Olayemi Cardoso, Governor of the Central Bank of Nigeria (CBN), has guaranteed Nigerians and private sector investors that interest rates will soon fall from their current level of 30 percent.
Yemi Cardoso stated that the current interest rate was set by the CBN’s Monetary Policy Committee, not him.
Cardoso mentioned this while addressing at the Business CEO Forum in Lagos. He stated that the MPC focuses on data rather than emotions.
The CBN governor’s clarification comes amid criticism from Aliko Dangote, Chairman of the Dangote Group, and Peter Obi, former Labour Party presidential candidate.On Tuesday, at a three-day National Manufacturing Policy Summit held by the Manufacturers Association of Nigeria (MAN), Dangote stated, “Right now, at 30%, no one can create jobs.
Dangote also stated that the present interest rate will not stimulate Nigeria’s economy.
Peter Obi, for his part, stated that the 30% interest rate will kill Micro, Small, and Medium Enterprises (MSMEs). He contended that no private employer would choose to take a credit at such a high rate when energy costs were solely the company’s responsibility.
Cardoso stated that data available to the MPC, Ways and Means, and government actions warranted interest rate increases.
“Unfortunately, we have a circumstance in which we were all present when a large amount of money supply entered the system. Ways and Means soared to ₦27 trillion. We saw interventions totaling ₦10.5 trillion. It has implications. Painful, but it has repercussions.
And to a significant extent, that is what we are currently paying for,” he added.
To clarify, the CBN governor stated, “Interest rates are not set by the governor of the central bank.” The Monetary Policy Committee sets interest rates. And, happily, we have a monetary comments policy committee made up of independent-thinking individuals. “These are people who are not emotional.”They look at data and basically agree with what it says. The MPC has made it clear that managing inflation is their top priority, and they have also stated that they will go to any length to do so.
He stated, “The MPC is aware that we ultimately want to grow. The country requires growth. If these hikes were not completed at the designated time. As you may recall, the naira-to-dollar exchange rate was on the verge of collapse.
“This promotes stability. It’s also a time issue. This is not something I expect to last forever. To the extent that the appropriate policies are implemented, which is evident based on the results we have seen. I believe that in the not-too-distant future, things will begin to moderate and interest rates will fall.
