The Central Bank of Nigeria (CBN) governor, Olayemi Cardoso, has reaffirmed the apex bank’s commitment to bringing Nigeria’s inflation rate down to a single digit in the medium to long term. Speaking on Thursday, February 20, 2025, after the Monetary Policy Committee (MPC) meeting in Abuja, Cardoso noted that inflation remains a major concern despite signs of economic recovery, 9am news reports
According to the recently rebased Consumer Price Index (CPI) by the National Bureau of Statistics (NBS), Nigeria’s headline inflation stands at 24.48% year-over-year. While this suggests some economic stabilization, Cardoso emphasized that it is still significantly higher than acceptable levels.
“As a data-driven organization, the CBN is currently analyzing the rebased CPI report and will share its findings once they are finalized,” Cardoso said.
During the two-day MPC meeting held on February 19-20, 2025, the committee decided unanimously to maintain key monetary parameters:
- Monetary Policy Rate (MPR): Retained at 27.5%
- Cash Reserve Ratio (CRR): 50% for Deposit Money Banks, 16% for Merchant Banks
- Liquidity Ratio: Held at 30%
Cardoso explained that the decision to hold interest rates steady was based on positive macroeconomic indicators, including stabilizing fuel prices and improved foreign exchange market conditions. The strengthening of the Naira against the dollar was also cited as a key reason for maintaining existing monetary policy measures.
Despite the MPC’s decision, Cardoso highlighted that food inflation remains a major challenge. Rising food prices continue to drive inflationary pressures, necessitating closer coordination between fiscal and monetary policies.
“We will certainly stay on course. We will be vigilant. We will not take anything for granted. Inflation has been too high for too long,” the CBN governor stated.
He stressed the importance of collaboration between monetary and fiscal authorities in achieving the single-digit inflation target.
“I would be deceiving you if I said fiscal policy alone could achieve this, or that monetary policy alone could do it. It won’t. Coordination has always been vital, but at no time has it been as critical as now. We can see positive changes, and we must not only sustain them but also enhance them,” he added.
The recent Monetary Policy Forum, which brought fiscal and monetary policymakers together, marked a significant step toward strengthening this cooperation.
CBN Reforms and Foreign Reserves Growth
Cardoso also highlighted key CBN reforms that have contributed to financial stability and investor confidence. These include:
- The introduction of the new FX code and the Electronic Foreign Exchange Matching System (EFEMS), which have contributed to the stabilization of the Naira.
- An increase in Nigeria’s foreign reserves, which rose to $39.4 billion as of February 14, 2025.
- A positive balance of payments, with Nigeria recording a current account surplus of $6.06 billion at the end of Q3 2024.
He further assured that Nigeria’s reserves are strong enough to cover more than nine months of imports, reinforcing the country’s economic resilience.
As Nigeria navigates economic challenges, the CBN remains committed to its inflation control objectives while ensuring exchange rate stability and monetary policy effectiveness. The MPC’s decision to hold interest rates steady underscores the central bank’s confidence in its current strategies, with a long-term focus on achieving sustainable economic growth.
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