- The governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, says CBN’s policy interventions helped keep inflation below 42.81 per cent in 2024
- Cardoso highlighted CBN’s interventions to enhance the economy
- He said the CBN will continue its orthodox monetary measures in 2025
The governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, said the apex bank’s policy interventions helped keep inflation at bay in 2024.
Cardoso said counterfactual estimates suggest that inflation could have surged to 42.81 per cent by December 2024 without the CBN’s policy interventions.
The CBN governor stated this at the 2025 Monetary Policy Forum, with the theme, ‘Managing Disinflation Process,’ held in Abuja on Thursday, January 30, which brought together ministers, heads of economic agencies, and private sector players.
Cardoso also projected that diaspora remittances would increase to N31.79 trillion when fourth quarter (Q4) figures for 2024 are released.
He further the CBN implemented bold policy measures across six Monetary Policy Committee (MPC) meetings throughout 2024, including raising the Monetary Policy Rate (MPR) by 875 basis points to 27.50 per cent, increasing the Cash Reserve Ratio for Other Depository Corporations by 1,750 basis points to 50.00 per cent, and adjusting the asymmetric corridor around the MPR.
Cardoso said, “Counterfactual estimates suggest that without these decisive policy interventions, inflation could have reached 42.81 per cent by December 2024.
“Throughout 2024, the Bank implemented several bold policy measures across six MPC meetings, including raising the Monetary Policy Rate by a cumulative 875 basis points to 27.50 per cent, increasing the Cash Reserve Ratio of Other Depository Corporations by 1,750 basis points to 50.00 per cent, and adjusting the asymmetric corridor around the MPR.
“The past year presented significant challenges, including consistent inflationary pressures exacerbated by global and domestic shocks.
“In spite of these challenges, our commitment to price and monetary stability yielded measurable progress.
“We have seen relative stability in the foreign exchange market, a reduction in the foreign exchange rate disparity, and a rise in foreign reserves to over $40 billion as of December 2024 – the highest in three years.”
CBN’s forex reforms in 2024 to enhance market efficiency
The CBN governor further noted the bank implemented critical foreign exchange reforms to enhance market efficiency.
He said these reforms, which include the unification of multiple exchange rate windows, contributed to a 79.4 per cent rise in diaspora remittances via International Money Transfer Operators (IMTOs) to $4.18 billion in the first three quarters of 2024, up from $2.33 billion in the same period in 2023.
He cited other forex-related interventions of the CBN including the clearing of a $7 billion forex backlog, which restored market confidence and improved forex liquidity, lifting restrictions on 43 items previously banned from access to the official forex market since 2015, and the introduction of bank recapitalisation policy to enhance the sector’s resilience and global competitiveness.
Also, the bank introduced the Nigeria Foreign Exchange Code to ensure ethical conduct, transparency, and efficiency in the forex market.
CBN to stick to orthodox monetary policies in 2025
Cardoso further stated that the apex bank has pledged to stick to orthodox monetary policies to tame inflation in 2025.
He added that managing disinflation amid persistent shocks would require strong policy coordination between fiscal and monetary authorities.
The apex bank governor stated that the focus must remain on price stability, the planned transition to an inflation-focused framework, and strategies to restore purchasing power and ease economic hardship.
He expressed optimism that Nigeria had turned a corner and that disinflation was within reach but stressed the need for bold and coordinated policy measures to consolidate progress.
Cardoso said, “As we move forward into 2025, I am optimistic that we are in the process of turning a corner and that disinflation is within reach.
“However, we must remain committed to bold policy measures to consolidate our progress.”
Achieving 15% inflation target in 2025 requires effective authorities’ collaboration – CBN
Meanwhile, TheRadar earlier reported that the Central Bank of Nigeria (CBN) said achieving the Federal Government’s 15 per cent inflation target as contained in the 2025 budget will require effective collaboration between the monetary and fiscal authorities, as well as the private sector.
The Deputy Governor, Economic Policy Directorate of the CBN, Muhammad Abdullahi, stated this on Tuesday, January 21, during the 11th National Economic Outlook: Implications for Businesses in 2025, organised by the Chartered Institute of Bankers of Nigeria (CIBN) Centre for Financial Studies in collaboration with B. Adedipe Associates Ltd in Lagos.
