Current Inflation Figures Remain High
The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has reaffirmed the bank’s long-term goal of bringing inflation down to single digits. Speaking on Thursday, he acknowledged that while the recently rebased Consumer Price Index (CPI) shows an annual inflation rate of 24.48%, this figure is still far from acceptable.
Cardoso emphasized that the inflation rate reflects the current economic realities. However, the CBN is determined to implement policies that will steadily drive inflation lower over time.
CBN to Publish Reviewed CPI Findings
As a data-driven institution, the CBN is reviewing the newly released rebased figures from the National Bureau of Statistics (NBS). Cardoso assured that the bank will publish its findings soon.
During a briefing on the Monetary Policy Committee (MPC) meeting, held on February 19 and 20, he confirmed that all key policy parameters remain unchanged. The Monetary Policy Rate (MPR) stays at 27.50%, while the asymmetric corridor remains at +500/-100 basis points.
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The committee also retained the Cash Reserve Ratio (CRR) at 50% for Deposit Money Banks and 16% for Merchant Banks. The Liquidity Ratio remains at 30%.
Policy Decisions to Support Economic Stability
According to Cardoso, the decision to maintain interest rates aligns with current macroeconomic conditions. Stability in the foreign exchange market and the gradual moderation of fuel prices are expected to positively impact price trends in the coming months.
However, he raised concerns over persistent inflationary pressures, particularly those driven by rising food prices.
“We remain committed to this path,” Cardoso stated. “Inflation has stayed too high for too long, and our goal, over the medium to long term, is to reduce it to single digits.”
Monetary and Fiscal Coordination is Key
Achieving this goal, he noted, will require strong collaboration between monetary and fiscal authorities. As economic improvements continue, both sectors must work closely to sustain progress.
“No single policy—monetary or fiscal—can solve this alone,” he explained. “Coordination is critical, especially now that we are seeing positive changes. We must not only maintain these gains but also build on them.”
He pointed to the recent Monetary Policy Forum, which brought together fiscal and monetary policymakers, as a step toward greater cooperation.
CBN Reforms Bolster Investor Confidence
Cardoso highlighted several CBN reforms that have strengthened investor confidence and stabilized the naira. Initiatives such as the Electronic Foreign Exchange Matching System (EFEMS) and the revised FX code have contributed to increased foreign reserves, which stood at $39.4 billion as of February 14, 2025.
With these reserves covering over nine months of imports, the CBN remains focused on ensuring exchange rate stability.
Additionally, the bank has unified the exchange rate, curbed currency round-tripping, and eliminated spreads on interbank transactions. These measures have led to a more stable FX market and a positive net foreign exchange flow.
Furthermore, the balance of payments has remained strong, with a current account surplus of $6.06 billion as of the third quarter of 2024.
