Naira Gains Appeal: CBN Highlights New Incentives for Nigerians Amid Rate Hikes
In a bold move, the Central Bank of Nigeria, led by Cardoso, has elevated interest rates from 18.75% in September 2023 to an impressive 27.25% within just 12 months, marking a significant 8.5% increase. Explore the implications of this dramatic shift!
During a press briefing on Tuesday following the 297th Monetary Policy Committee (MPC) meeting in Abuja, CBN Governor Olayemi Cardoso announced a pivotal increase in the Monetary Policy Rate (MPR) by 50 basis points, raising it from 26.75% to 27.25% to combat soaring inflation, currently at 32.15%.
Appointed by President Bola Tinubu in September 2023 after the controversial tenure of Godwin Emefiele, Cardoso’s leadership has seen interest rates rise dramatically—an 8.5% jump from 18.75% in just one year. Under his guidance, the Naira has also faced challenges, with its value plummeting from ₦700 to over ₦1,600 per dollar since September 2020.
When questioned about the effectiveness of these aggressive monetary policies amid rising economic hardships for Nigerians, Cardoso attributed current challenges to the previous administration’s loose monetary policies, which saw a staggering increase in money supply—from ₦19 trillion in 2015 to ₦54 trillion in 2023. “This dramatic surge led to too much money chasing too few goods,” he explained.
He acknowledged the difficulties many are facing but expressed confidence that the measures being implemented are essential for stabilizing the economy. “These rate hikes are designed to restore confidence in the Naira and attract back portfolio investors who have left,” he stated. “While these changes may be tough in the short term, they are necessary to prevent the inefficiencies of the past from recurring. We believe this path will lead us to a more stable and resilient economy.”
