The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, emphasized that the country’s monetary policy would remain focused on orthodox strategies in a firm commitment to tackling inflation.
Speaking at a press briefing following the 298th Monetary Policy Committee (MPC) meeting in Abuja, Cardoso reiterated that there was no going back on the current approach, highlighting that the central bank would deploy every tool at its disposal to curb inflation.
He said: “Let me first say that the Central Bank is resolute and committed to continuing to fight the war against inflation. There’s no going back on that. And as I’ve said at previous fora, we are going to deploy everything in our arsenal to ensure that we are able to tame it. And of course this entails the return to Orthodox monetary policies. So, I think it is important to state that up front there’s no going back on that.”
Cardoso’s remarks came as the MPC voted to further tighten monetary policy in response to persistent inflationary pressures. The committee raised the Monetary Policy Rate (MPR) by 25 basis points to 27.50%, up from 27.25%, continuing the tightening trend initiated earlier in the year.
Other key decisions included maintaining the asymmetric corridor around the MPR at +500 to -100 basis points, keeping the Cash Reserve Ratio (CRR) for deposit money banks at 50%, and the liquidity ratio at 30%. These measures are designed to reduce inflationary pressures, which have remained stubbornly high despite earlier attempts at stabilization.
The CBN Governor emphasized that the effects of these policies would not be immediately visible, noting that the timeline for policy implementation to have a tangible impact can range from six months to a year.
However, Cardoso expressed optimism that the results would start to show by the first quarter of 2025, marking a crucial period for the country’s economic recovery.
Cardoso said: “Now, it’s also important for people to understand that there’s a timeline between when you implement policies and when they have impact. And that timeline, quite frankly, can be, you know, anything up from six months to nine months to a year. All depends on what you’re doing.
“Our own perspective is that we expect to see greater results in the first quarter of 2025 and you can do the math from the time we started tightening. So ,we expect to see this in the first quarter of 2025.”
While the CBN remains focused on controlling inflation through monetary policy, Cardoso also acknowledged the need for broader structural reforms to complement these efforts.
He stressed that the central bank is working closely with relevant government agencies to address the underlying structural challenges that contribute to inflation, including supply disruptions and infrastructure deficiencies.
Also, the governor noted the ongoing challenges in the foreign exchange market, stressing that the CBN would continue to monitor and regulate the market to ensure it operates efficiently, reflecting the true value of the naira.
Cardoso also discussed the role of the CBN in ensuring price stability, particularly in the face of exchange rate pressures. He reiterated the importance of foreign exchange liquidity and promised that the bank would explore measures to enhance market stability.
