By Milcah Tanimu
The Central Bank of Nigeria (CBN) admitted on Monday that raising the interest rate to 27.25% is “painful” for borrowers. Despite this, the apex bank emphasized that this decision was essential for reducing excess money in circulation and effectively controlling inflation.
CBN Governor Olayemi Cardoso addressed the concerns of critical stakeholders opposing the interest rate hike during a recent speech to the Harvard Club of Nigeria in Lagos. He recognized the hardship caused by the decision but reiterated its necessity for long-term economic stability.
Cardoso stated, “Leadership involves making difficult decisions aimed at ensuring long-term stability rather than focusing on short-term comfort.” He highlighted the importance of the CBN’s core mandate: maintaining price stability despite political and economic pressures.
“Our decision to raise the Monetary Policy Rate (MPR) to 27.25% was a bold move. While higher interest rates are painful for borrowers, they are crucial for curbing excess money in circulation and controlling inflation,” he explained.
He added that true leadership means avoiding the temptation to pursue too many initiatives and remaining focused on essential goals. “It is easy to become distracted by various pressures, but as a leader, one must prioritize,” Cardoso concluded.
