Interest Rate Will Come Down Soon – CBN Governor, Cardoso

The Governor of Central Bank of Nigeria (CBN), Olayemi Cardoso, has assured Nigerians and private sector investors that interest rate would soon come down from the current of 30 percent.

Yemi Cardoso said the current interest rate was fixed by Monetary Policy Committee of the CBN  and not him.

Cardoso said this while speaking at Business CEO Forum, in Lagos. He said the MPC focus on data and not emotions.

The CBN governor’s clarification comes amid outcries from the Chairman of Dangote Group, Aliko Dangote and former presidential candidate of the Labour Party, Peter Obi.

On Tuesday, at a three-day National Manufacturing Policy Summit organized by the Manufacturers Association of Nigeria (MAN), Dangote said, “Right now, at 30%, there is no way anybody can create jobs.” Dangote added that the current interest rate would not grow Nigeria’s economy.

On his part, Peter Obi said the 30 percent interest rate would kill Micro, Small and Medium Enterprises (MSMEs). He argued that no private employer would like to take a credit at such rate when energy cost remained the sole duty of the company to bear.

Cardoso said data available to MPC, Ways and Means and interventions from governments necessitated raising the interest rates.

“Sadly, we have a situation where we were all there when a lot of money supply went into the system. We all saw Ways and Means soar to ₦27 trillion. We saw interventions ₦10.5 trillion. It has its consequences. Painful, but it has its consequences. And to a large respect, that is what we’re paying for now,” he added.

Giving further clarification, CBN governor added, “Interest rates are not set by the governor of the central bank. Interest rates are set by the Monetary Policy Committee. And thankfully, we have a monetary comments policy committee comprised of independent minded thinking people. And these are people who are not given to emotion.

“What they look at is data, and they basically go along with what the data says. The MPC has made it very clear that for them the major issue is taming inflation have also made it very clear that they will do whatever is necessary to tame inflation.”

He said, “The MPC is not oblivious to the fact that ultimately we do want to grow. The country does need growth. If these hikes were not done at the time they were done. If you recall, naira to dollar was almost tipping over.

“This helps to stabilize. Also, it is a time issue. This is not something that I expect would remain with us forever. To the extent that the right policies are used, and obviously, with the results we’ve seen the right policies are being used. I believe that in the not too distant future, things will begin to modulate and interest rates will come down.”