Higher interest rate painful for borrowers but necessary to control inflation – Cardoso

Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso, has described the decision to raise the Monetary Policy Rate (MPR) to 27.25% as a bold step necessary to control inflation by reducing excess money in circulation, though it may be challenging for borrowers.

Speaking in Lagos at a Harvard Club of Nigeria event, Cardoso emphasized that leadership requires making difficult choices for long-term stability over short-term ease. He also highlighted the introduction of the Electronic Foreign Exchange Matching System (EFEMS) by the CBN to improve transparency and build trust in foreign exchange transactions.

He said: “Trust is the currency of central banking. If the public loses trust in the institution, the efficacy of its policies diminishes.

“Our decision to implement the Electronic Foreign Exchange Matching System (EFEMS) is rooted in this understanding.

“By enhancing transparency and providing more accurate oversight of forex transactions, we send a strong signal that the CBN is serious about fair and efficient markets.”