Rita Odafe
Yemi Cardoso, Governor of CBN
The Central Bank of Nigeria’s (CBN) governor, Yemi Cardoso, recently discussed the increase of the Monetary Policy Rate (MPR) to 27.25 percent.
He characterized this decision as a bold and necessary step, emphasizing that while higher interest rates are challenging for borrowers, they play a critical role in reducing the amount of money in circulation and managing inflation.
Cardoso highlighted that effective leadership often involves making tough decisions that prioritize long-term stability rather than immediate comfort during challenging times.
Speaking in Lagos at an event for the Harvard Club of Nigeria, he addressed ‘Leadership in Challenging Times: Restoring Credibility, Building Trust and Containing Inflation.’
He mentioned that the CBN’s choice to introduce the Electronic Foreign Exchange Matching System (EFEMS) stems from recognizing the importance of trust within central banking. The aim is to improve transparency and ensure more precise oversight of forex transactions.
He stated: “Trust is essential in central banking. A loss of public confidence undermines the effectiveness of our policies.”
“Our implementation of EFEMS reflects this principle.”
“By boosting transparency and oversight of currency transactions, we demonstrate the CBN’s commitment to fostering fair and effective markets,” he added.
Cardoso pointed out that as the leader of a central bank, making hard and sometimes unpopular choices is key. He reassured that the bank values feedback and will review its actions if they do not meet intended goals.
“Amidst economic difficulties, our focus must remain on key objectives—restoring credibility, cultivating trust within the financial system, and primarily, managing inflation. These are fundamental to any genuine recovery,” he remarked.
While affirming that managing inflation is at the heart of the bank’s mission, he recognized that the CBN has yet to achieve its target. However, he noted that recent data from the National Bureau of Statistics (NBS) showing declines in July and August 2024 indicates progress in the right direction.
