CBN admits increase in interest rate to 27.75% painful for borrowers

The Central Bank of Nigeria (CBN) on Monday admitted that the increase in the interest rate to 27.25% was “painful” for borrowers.

The apex bank however stressed that the decision was necessary to reduce excess money in circulation and control inflation effectively.

This clarification followed strong opposition from critical stakeholders in the economy who kicked against the CBN’s decision to raise the interest rate again.

The CBN Governor, Olayemi Cardoso, who addressed members of the Harvard Club of Nigeria in Lagos at the weekend, admitted that the decision was painful but necessary.

He said the apex bank understands that leadership involves making difficult decisions aimed at ensuring long-term stability, rather than focusing on short-term comfort.

READ ALSO: CBN introduces electronic FX matching system to curb speculation

Cardoso stressed that the bank must remain focused on its core mandate of ensuring price stability, rather than being swayed by political and economic pressures.

“Our decision to raise the Monetary Policy Rate (MPR) to 27.25% was a bold move. Higher interest rates, while painful for borrowers, are necessary to curb excess money in circulation and control inflation.

“Leadership is about making hard choices to secure long-term stability over short-term comfort in moments like these

“Leading through challenging times means avoiding the temptation to take on too many initiatives. The Central Bank must focus on its core mandate—price stability. It is easy to become distracted by various political and economic pressures, but as a leader, one must prioritise,” he added.

By: Babajide Okeowo

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