The Central Bank kept interest rates stuck at 27 percent after their committee wrapped up meetings in Abuja with Governor Olayemi Cardoso saying they want to lock in gains from bringing down inflation and keeping the financial system stable. All twelve members voted to hold the rate while tweaking other banking requirements like cash reserves and liquidity ratios.
Cardoso pointed out that inflation has been dropping for seven straight months and the country has around ten months of import cover sitting in reserves right behind $46.7 billion in external holdings. He said the naira is way more stable with exchange rate spreads falling from 60 percent down to about 2 percent since reforms kicked in. Foreign investors are coming back because the market has become more transparent and the country has escaped the FATF grey list.
The central bank boss defended cutting off direct lending programs that dumped over 10 trillion naira into the economy with almost half still unpaid. He said past interventions created a moral hazard where people grabbed loans without planning to pay them back. The new approach lets commercial banks handle development finance instead of the CBN subsidizing rates and crowding everyone out.
Cardoso pointed out that inflation has been dropping for seven straight months and the country has around ten months of import cover sitting in reserves right behind $46.7 billion in external holdings. He said the naira is way more stable with exchange rate spreads falling from 60 percent down to about 2 percent since reforms kicked in. Foreign investors are coming back because the market has become more transparent and the country has escaped the FATF grey list.
The central bank boss defended cutting off direct lending programs that dumped over 10 trillion naira into the economy with almost half still unpaid. He said past interventions created a moral hazard where people grabbed loans without planning to pay them back. The new approach lets commercial banks handle development finance instead of the CBN subsidizing rates and crowding everyone out.
