Audio By Carbonatix
Nigeria's central bank will do whatever is necessary to tame double-digit inflation but expects price pressures to moderate and interest rates to drop in the not-too-distant future, Central Bank of Nigeria (CBN) governor said on Thursday.
Inflation, at 33.95% in May, and a weaker currency have helped fan a cost-of-living crisis in one of Africa's largest economies, eroding incomes and angering citizens.
The central bank is under pressure from businesses who say high interest rates are stunting growth, but governor Yemi Cardoso said the monetary policy committee would not be driven by emotion in its rate decisions.
At its last sitting in May, the bank raised the main lending rate to 26.25% (NGCBIR=ECI), opens new tab, the third increase this year. The next rate decision is on July 23.
"These (MPC) are people who are not given to emotion. What they look at is data and they basically go along with what the data says," Cardoso told business leaders in Lagos.
"The major issue is taming inflation...and they would do whatever is necessary to tame inflation."
Inflation in Nigeria has been driven in large part by high money supply, Cardoso said, adding that the federal government borrowed too much from the central bank, which itself was involved in quasi-fiscal activities.
Under President Bola Tinubu, who came into office last year, the government and the CBN say they have stopped such practices.
"It has its consequences...and in large respect, that's what we are paying for now," Cardoso said.
But "in the not too distant future things will moderate and interest rates will begin coming down," he added.
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