- CBN Governor Olayemi Cardoso acknowledged Nigeria’s high inflation rate but expressed optimism about the effectiveness of current monetary policies
- Cardoso projected a downward trend in inflation by 2025, emphasizing that the full effects of monetary policy take time to materialize
The Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso, has acknowledged that the country’s inflation rate remains unacceptably high but expressed optimism that current monetary policies are beginning to show positive signs.
Cardoso highlighted the bank’s commitment to stabilising the economy and reducing inflation at the 2024 Annual Bankers’ Dinner, which was organized by the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos.
According to the National Bureau of Statistics (NBS), Nigeria’s inflation rate rose to 33.88% in October, up from 32.70% in September. Despite this, Cardoso projected a downward trend in inflation by 2025, stating:
“Our tight monetary policy stance has altered the previous dire trajectory, and we expect a downward trend in 2025. Inflation remains unacceptably high, but the signs are encouraging, particularly given that the full effects of monetary policy typically take six to nine months to impact the consumer sector.”
The CBN Governor assured stakeholders that interest rate measures, while challenging for businesses and families, are temporary and will be adjusted as inflation improves.
Cardoso also addressed concerns about the naira’s exchange rate against the US dollar, disputing claims that the current rate reflects Nigeria’s true market value.
“The current US dollar exchange rate reflects the price that the most desperate buyers are willing to pay, and this, in my view, does not represent the true market value of Nigeria,” he said.
To improve foreign exchange (FX) market operations, the CBN plans to introduce an electronic FX matching system, a strategy that has been proven effective in other markets.
The event also highlighted the banking industry’s resilience in economic pressures. Prof. Pius Olanrewaju, Chairman of CIBN, noted steady economic growth in 2024, citing GDP growth rates of 2.98% in Q1, 3.19% in Q2, and 3.46% in Q3.
He praised the ongoing bank recapitalization exercise, describing it as a step toward strengthening the financial sector and supporting Nigeria’s vision of a $1 trillion economy by 2030.
Cardoso reaffirmed the CBN’s commitment to maintaining a robust cash buffer to meet national needs, signalling sustained efforts to stabilize the economy and restore confidence in the financial system.