The new Governor of Central Bank of Nigeria (CBN), Mr. Godwin Emefiele has clarified his agenda on the planned reduction of lending rates, saying no action will be taken on the rates until after the general elections slated for next year.
Speaking to THISDAY in an exclusive interview Saturday, the CBN Governor said his agenda which he unveiled last week is to run for a period of five years, explaining that the apex bank will continue to hold unto to exchange rates and will not devalue the currency.
Emefiele, who said there is no need for panic, regretted that certain mischievous people were already twisting his statement of intent to create unnecessary panic in the market.
“There are some mischievous information being passed in the market and I want to correct them. First of all, the agenda that I presented is a five year-agenda. It is not an agenda for today and in that agenda, I said we will continue to hold unto the exchange rate and that we will not devalue the currency. Secondly, we said that there will be a gradual reduction in lending rates. The lending rate aspect is not an action that we are taking now. If you check my write-up on between pages nine and 11, I said there that the lending rate will be done with a gradual reduction and we will be looking at liquidity as well as the environment as we move towards the election. Then yesterday, I granted an interview to Reuters, where I stated very clearly and specifically that lending rate action is not an action that will be taken before the election. We will be monitoring liquidity and other parameters in the system, but some people are mischievously reading meanings to it and for that reason they are trying to react to the market,”
the governor said.
Interest rates have been stuck at 12 percent since late 2011, and liquidity tightening measures are credited with lowering inflation from 15 percent in 2010 to 7.9 percent currently. But businesses say lending rates remain punitive.