Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has said the bank’s decisive monetary policy actions, to restore price stability and anchor expectations are yielding results.
He cited the country’s inflation rate which has dropped for six months straight, hitting 18.02 per cent in September – its lowest point in three years.
Cardoso said this in a statement on Thursday in Washington.
Citing latest data by the National Bureau of Statistics (NBS), which said that core inflation, slowed to 19.53 per cent, while food inflation, moderated to 16.87 per cent over the same period, he said the sustained decline, marked a significant reversal from the inflationary peak of 34.19 per cent in June 2024.
“In response to those pressures, the CBN raised its Monetary Policy Rate (MPR) from 18.75 per cent to 27.50 per cent, through a sustained tightening cycle. It also increased the Cash Reserve Ratio (CRR) to 50 per cent for commercial banks and 16 per cent for merchant banks.
“At its September meeting, the CBN eased slightly, lowering the MPR by 50 basis points, to 27.00 percent and the CRR for commercial banks to 45 percent, while maintaining a firm anti-inflationary stance.
“Monetary tightening was complemented by reforms in the foreign exchange market, including exchange rate unification and enhanced transparency to improve price discovery in the market,” he said.
The CBN governor said the Naira had since stabilised, with the spread between the official and Bureau de Change (BDC) rates, narrowing to below two percent.
He further said improved liquidity in the FX market had helped to reduce the pass through imported inflation, and reinforced price stability.
“Foreign reserves remain above 43 billion dollars, providing more than eleven months of forward import cover, supported by sustained forex inflows,” he said.
He expressed the CBN’s commitment to strengthening the disinflation trend, supported by a combination of exchange rate stability and durable improvements in food supply.
He said continued moderation in petroleum product prices would also help in strengthening disinflation.
Cardoso had earlier given assurance that inflation would continue to trend downward.
He gave the assurance at the ongoing annual meetings of the International Monetary Fund and the World Bank Group in Washington.
He said downward trend, in the near term, was supported by tight monetary conditions, a stable Naira, and increased food supply.
