Interest rates may stay high, says Cardoso

Onwubuke Melvin
Onwubuke Melvin

The Governor of the Central Bank of Nigeria, Dr Olayemi Cardoso, has said that the members of the Monetary Policy Committee would do whatever is necessary to tame the country’s high inflation.

Cardoso told the Financial Times on Monday, indicating that interest rates would stay high for as long as necessary to tackle inflation, according to The Punch.

He underlined that there was “every indication” that the MPC would “do whatever is necessary” to keep soaring inflation in check.

“They will continue to do what has to be done to ensure that inflation comes down,” Cardoso said.

Since the first meeting of the Monetary Policy Committee in February, when it raised the benchmark lending rate by 400 basis points to 22.75 % from 18.75 % and reviewed up to 25.75 % in March, its hawkish stance on inflation has become apparent.

The next MPC meeting is scheduled to be held on May 20-21.

Financial analysts had projected that the MPC would continue to raise interest rates.

Analysts at Meristem Securities projected an uptick in the headline inflation for April to 34.43 per cent year-on-year (vs. 33.20 per cent YoY reported in March 2024).

Cardoso said he hoped that high rates would not be for too long and discourage investment and production, despite the current hawkish stance of the CBN.

“Hiking interest rates has had a dampening effect on the foreign exchange market, so that has begun to moderate. It’s not a zero-sum game. You lose on one side, you get on the other,” he said.

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