The governor of the central bank of Nigeria (CBN), Olayemi Cardoso, has hinted that the apex bank will keep interest rates high until inflation subsides, keeping with the policy of implementing orthodox policies.
Cardoso who was speaking in a recent interview also said the monetary policy committee (MPC), which he chairs, would do whatever is necessary to tame soaring inflation.
“They will continue to do what has to be done to ensure that inflation comes down.
“Let’s face it: for a long period of time, 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,” he said
Inflation rate in Nigeria remains high at 33.2 percent, the highest in three decades, while food inflation is higher still at 40 percent.
The monetary policy rate was hiked by 400 and 200 basis points in February and March respectively, which lifted the key lending rate to 24.75 percent.
Speaking on the fluctuating value of the naira against the us dollar, Cardoso said the situation had now stabilised.
He said investors had previously tended to head for the window in response to currency fluctuations, but now, there had been a fundamental shift.
“Hiking interest rates obviously 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.
