The Governor of the Central Bank of Nigeria (CBN), Dr. Olayemi Cardoso, has indicated that the bank may soon be able to slow down the increases in the benchmark interest rate. This announcement was made on Saturday in Lagos at the launch of the book titled “The Power of One Man: How the Soludo-Engineered Consolidation Transformed Nigerian Banks to Global Players,” authored by Ray Echebiri.
Dr. Cardoso, represented by the CBN’s Deputy Governor of Financial Stability, Phillip Ikeazor, emphasized the importance of maintaining higher interest rates to mitigate the risk of hyperinflation and its severe consequences.
He stated, “Once you do not tame and control inflation and you get into hyperinflation, it takes you several years to get out of it. There is still a South American country that still has significant oil reserves but they are in hyperinflation and I think everyone is aware of what is happening in that economy. We have another country in East Africa which is also in hyperinflation. We know how hard they are struggling to get out of that.”
Cardoso highlighted the critical need for inflation control, pointing to the dire situations in some countries facing hyperinflation despite having substantial natural resources. He underscored that once an economy enters hyperinflation, it can take many years to recover, using examples from South America and East Africa to illustrate the challenges.
Future Economic Outlook
Experts sat the potential slowdown in interest rate increases suggests a cautiously optimistic outlook for Nigeria’s economy. The decision to adjust the rates will be contingent on continued efforts to manage inflation effectively and ensure economic stability. The CBN’s proactive measures aim to prevent hyperinflation and promote sustainable economic growth.
The CBN’s strategic approach to managing interest rates and inflation is crucial for Nigeria’s economic health. As the country navigates its financial landscape, the CBN’s policies will play a pivotal role in shaping its economic future, striving to balance growth with stability.
