The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has indicated that the current high interest rate might be lowered soon as inflationary pressure eases. Cardoso made this known while delivering his keynote speech at the Chartered Institute of Bankers of Nigeria (CIBN) annual dinner on November 29, 2024.
Cardoso says that increasing the Monetary Policy Rate (MPR) by 875 points to 27.5% this year was a “necessary action” to control inflation and bring back stability. But he also mentioned that these changes are not meant to last forever.
Cardoso acknowledged the difficulties that higher interest rates create for businesses and families. However, he stressed that the CBN is closely watching the data. With inflation showing signs of getting better over time, the CBN will change interest rates to match.
The National Bureau of Statistics (NBS) stated that Nigeria’s main inflation rate increased to 33.88% in October 2024, up from 32.7% in September 2024. The increase in inflation was linked to higher transportation costs and food prices.
The CBN had previously increased its interest rate by 0.25 percentage points, from 27.25% to 27.50%, to tackle rising inflation. This decision was announced by Cardoso at the conclusion of the Monetary Policy Committee (MPC) meeting held in Abuja. With the current interest rate at 27.50%, Cardoso’s suggestion of a possible rate reduction has raised hopes among businesses and individuals who have been struggling with the high rates.
