The Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso, said the bank would keep interest rates high until inflation subsides by implementing orthodox policies.
Cardoso disclosed this during an interview with the Financial Times.
He said that the Monetary Policy Committee (MPC), which he chairs, would do whatever is necessary to tame soaring inflation.
This is because Nigeria’s inflation rate remains high at 33.2 per cent, the highest in three decades, while food inflation is still at 40 per cent.
He said, “there is every indication that the MPC would do whatever is necessary. They will continue to do what has to be done to ensure that inflation comes down.
“Let’s face it: for a long period, the CBN did not embrace orthodox monetary policies. We want to go back to using an orthodox method, and it will take us to where we want to go. The apex bank has been reoriented to focus on price and monetary stability,” Cardoso said.
The monetary policy rate was increased by 400 and 200 basis points in February and March, respectively, raising the key lending rate to 24.75 percent.
Cardoso stated that the situation with the naira’s fluctuating value against the US dollar has now stabilised.
He noted that the investors had previously tended to head for the window in response to currency fluctuations. But now there has been a fundamental shift.
”They’re getting more comfortable with the market,” he stated.
