Lagos, Nigeria – The Governor of the Central Bank of Nigeria (CBN), Dr. Olayemi Cardoso, announced that the bank will soon implement measures to ease the upward trajectory of the benchmark interest rate. The announcement was made on Saturday during the unveiling of the book ‘The Power of One Man: How Soludo’s Consolidation Revolutionized Nigerian Banks into Global Competitors’ by Ray Echebiri.
Represented by the Deputy Governor of Financial Stability, Phillip Ikeazor, Cardoso emphasized the importance of maintaining the current interest rate to mitigate the threat of hyperinflation and its severe impacts.
“Once you do not tame and control inflation and you get into hyperinflation, it takes you several years to get out of it. There is still a South American country that still has significant oil reserves but they are in hyperinflation and I think everyone is aware of what is happening in that economy. We have another country in East Africa which is also in hyperinflation. We know how hard they are struggling to get out of that,” Ikeazor stated.
The Deputy Governor highlighted the CBN’s core mandate of price stability, maintaining a stable exchange rate, and fostering economic growth. He stressed that avoiding hyperinflation is crucial as it renders monetary tools ineffective.
“That will be as long as we can control and can reverse galloping inflation. Once we can do that, then we maintain. We are all aware that in the Western world, we did have rate hikes to be able to control theirs and they maintained it for a very long time. It is only now that they have stopped rate hikes but they have not even started dropping the rates as we speak,” Ikeazor added.
He concluded by noting that while the CBN will continue to tighten and hold on to the current rate hikes for a little while, the bank is optimistic about slowing down on the rate hikes in the near future.
