Kehinde Fajobi
The Central Bank of Nigeria (CBN) has stated that without its policy interventions, inflation in the country could have surged to 42.81% by December 2024.
CBN Governor Olayemi Cardoso made this known on Thursday at the 2025 Monetary Policy Forum in Abuja.
He highlighted the bank’s bold measures in 2024, including raising the Monetary Policy Rate (MPR) to 27.50% and increasing the Cash Reserve Ratio for Other Depository Corporations to 50.00%.
“Counterfactual estimates suggest that without these decisive policy interventions, inflation could have reached 42.81 per cent by December 2024,” Cardoso said.
He also disclosed that the bank had implemented critical foreign exchange reforms, such as unifying multiple exchange rate windows and clearing a $7bn FX backlog, which improved liquidity and restored investor confidence.
These reforms contributed to a 79.4% increase in remittances via International Money Transfer Operators, reaching $4.18bn in the first three quarters of 2024 compared to $2.33bn in the same period in 2023.
The CBN projects that total diaspora remittances will rise to ₦31.79tn when full-year data for 2024 is released.
The bank also introduced the Nigeria Foreign Exchange Code to enhance transparency and efficiency in the FX market.
Cardoso reaffirmed the bank’s commitment to orthodox monetary policies in 2025, saying, “Achieving macroeconomic stability requires sustained vigilance and a proactive monetary policy stance.”
On disinflation, he stressed that tackling inflation amid persistent economic shocks would demand strong coordination between fiscal and monetary authorities.
He expressed optimism that Nigeria had “turned a corner” but emphasised the need for continued bold policy actions.
CBN Deputy Governor, Economic Policy, Mohammed Sani Abdullahi, also spoke at the forum, noting that the liberalisation of the FX market had significantly reduced speculative-driven premiums.
“Prior to the adoption of a flexible exchange rate regime, the average exchange rate premium stood at an alarming 62.33 per cent between January and May 2023.
“With the introduction of the flexible exchange rate regime, this premium was drastically reduced to an all-time low of 0.10 per cent by June 2023, signalling significant progress towards market convergence,” he said.
Abdullahi acknowledged that supply and demand shocks had hindered efforts to achieve a single-digit inflation target, making continued engagement with stakeholders essential.