The Central Bank of Nigeria (CBN) has vowed that it will not succumb to pressure from some quarters in Nigeria to reduce interest rate as such move would worsen inflation.
A top official at the Apex Bank who spoke on condition of anonymity at the weekend, insisted that reducing the interest rate would further erode the incomes of the poor people.
Nigeria’s inflation rate, according to the last report by the National Bureau of Statistics (NBS), is 17.26 percent.
The official explained that bringing down interest rate will encourage massive borrowing by the privileged few who may turn to the foreign exchange market and put further pressure on the Naira.
“We decided that we will be people-focused Central Bank. We voted in favour of controlling inflation than bringing down interest rate because inflation is the worst enemy of the poor masses.
“In order to ameliorate the impact of high interest rate we have created different programmes like the Micro, small and medium enterprises development fund (MSMEDF) and the anchor borrowers programme which offer loans at only 9 per cent to low income earners.
“Interest rates will come down but not until we have improved our business space and provided infrastructure, especially power.”
The source said that the battle to stabilize the Naira is far from being over as forex speculators are still pushing hard.
“The battle is not yet over because the speculators are still pushing, but by the grace of God and the efforts of CBN we are winning.
“And, we are happy with the results so far, all indices are very positive and the masses of Nigerians are better for it.” [myad]
