Cardoso: CBN’s intervention prevented 42.81% inflation rate

Olayemi Cardoso, governor of the Central Bank of Nigeria (CBN), says the apex bank’s “decisive policy interventions” prevented inflation from rising to 42.81 percent in December 2024.

Cardoso spoke at the 2025 monetary policy forum of the apex bank on Thursday.

The event, held in Abuja, was attended by ministers, heads of departments and agencies, and private sector players.
For 2025, Cardoso said the CBN must remain committed to bold and coordinated policy measures to sustain and consolidate its progress.

The CBN governor assured that the bank would continue to implement orthodox monetary policy measures to address inflationary pressures throughout 2025.

‘REMITTANCES TO HIT N31.7TRN IN Q4 2024’

The economist also projected that diaspora remittances would rise to N31.787 trillion when the fourth quarter (Q4) 2024 figures become available.

“Throughout 2024, the CBN implemented several bold policy measures across six MPC meetings,” he said.

“These include raising the Monetary Policy Rate (MPR) by a cumulative 875 basis points to 27.50 per cent.

“They also include increasing the Cash Reserve Ratio (CRR) of Other Depository Corporations (ODCs) by 1750 basis points to 50 percent, and adjusting the asymmetric corridor around the MPR.”

‘CBN’S REFORMS POSITIVELY IMPACTED THE ECONOMY’

Cardoso said the CBN’s reforms strengthened the financial system, unified the exchange rate, and produced tangible results that positively impacted the economy.

He said remittances through international money transfer operators (IMTOs) increased by 79.4 percent in the first three quarters, reaching $4.18 billion, compared to $2.33 billion in the same period of 2023.

According to the CBN chief, the apex bank successfully cleared a backlog of foreign exchange (FX) commitments amounting to $7 billion, restoring market confidence and improving FX liquidity.

“We lifted restrictions on 41 items previously banned from access to the official FX market, a measure introduced in 2015,” Cardoso noted.

“We also introduced new minimum capital requirements for banks, effective by March 2026.

“This is to strengthen the resilience and global competitiveness of Nigeria’s banking sector, positioning it to support the ambition of a one trillion-dollar economy.”

Cardoso also highlighted other policy initiatives, such as the women initiative for finance and investment (WIFI), launched under the national financial inclusion strategy.

WIFI, he said, aims to bridge the gender gap in financial access by empowering women through financial services, education, and digital tools.

“There is also the recently launched Nigeria Foreign Exchange Code, marking a decisive step forward for integrity, fairness, transparency and efficiency in our FX market,” Cardoso said.

“Built on six core principles, the FX code represents a binding commitment from the financial community to rebuild trust and inspire confidence.

“These reforms reflect our commitment to creating an enabling environment for inclusive economic development.”

‘VIGILANCE, PROACTIVE POLICY NEEDED IN 2025’

Cardoso stressed that achieving macroeconomic stability in 2025 requires continuous vigilance and a proactive monetary policy stance to manage inflation effectively.

He also said managing disinflation in 2025 would demand robust policies and close coordination between fiscal and monetary authorities to stabilise expectations and maintain investor confidence.

“Our focus must remain on price stability, the planned transition to an inflation-targeting framework, and strategies to restore purchasing power and ease economic hardship,” he said.

“As we move forward into 2025, I am optimistic that we have turned a corner and that disinflation is within reach.

“However, we must remain committed to bold, coordinated policy measures to consolidate our progress.”

On his part, Mohammed Abdullahi, deputy governor, economic policy of the CBN, said liberalising the foreign exchange market is essential for unifying a fragmented system and reducing premiums driven by speculation and inefficiencies.

Abdullahi said introducing a flexible exchange rate regime significantly reduced the average exchange rate premium from 62.33 percent between January and May 2023 to an all-time low of 0.10 percent by June 2023, marking significant progress toward market convergence.