Olayemi Cardoso, governor of the Central Bank of Nigeria (CBN), has cautioned against renewed pressure on the apex bank to return to intervention programmes previously deployed by the institution.
He said such measures created distortions in the bank’s
financial position and weakened monetary policy effectiveness.
Cardoso spoke on Thursday at the opening session of the
monetary policy committee (MPC) workshop held in Abuja, according to a
statement on Sunday.
The workshop focused on ‘Strengthening Monetary Policy
Effectiveness Towards Sustainable Macroeconomic Stability’.
The governor said the credibility gradually being restored
to the apex bank over the last two and a half years was largely due to its
decision to rely on conventional monetary policy tools instead of unorthodox
interventions.
“The credibility we are now rebuilding and the progress
achieved over the last two and a half years stem largely from returning to
orthodox monetary policy anchored on transparency, policy discipline and market
confidence,” Cardoso said.
The economist warned that intervention programmes
implemented in the past weakened policy transmission and blurred the line
between fiscal and monetary responsibilities.
He said the bank would continue to focus on transparency,
evidence-based policy decisions and institutional reforms aimed at achieving
sustainable macroeconomic stability.
Cardoso said the CBN has made significant progress in
strengthening internal processes and improving policy coordination, noting that
decision-making is now increasingly driven by data analysis, technical
evaluations, and structured deliberations.
He said the bank has also improved communication with
investors, businesses, financial markets, and the public to make monetary
policy direction more predictable and easier to understand.
“These efforts are part of our medium-term transition
towards a clearer inflation-targeting framework that places price stability at
the centre of monetary policy,” he said.
The governor explained that the transition would require
deeper institutional reforms, stronger collaboration among economic
institutions and sustained technical work to ensure long-term success.
Reflecting on the conditions inherited by the previous
management, Cardoso said the CBN faced major institutional and policy
challenges at the beginning of the administration.
He said the bank’s autonomy had weakened, confidence in
monetary policy had fallen, and there was excessive dependence on
non-conventional monetary tools.
The economist also said the foreign exchange (FX) market at
the time was opaque and inefficient, adding that weak coordination between
fiscal and monetary authorities reduced overall policy effectiveness.
“These structural issues contributed to rising inflation,
exchange-rate instability and declining investor confidence,” he said.
‘REFORMS INTRODUCED ARE YIELDING RESULTS’
Cardoso, however, noted that reforms introduced by the
current management have started yielding positive outcomes.
He said the CBN has restored a more orthodox monetary policy
framework under the current MPC structure, with stronger reliance on
traditional tools and the monetary policy rate (MPR) as the key instrument for
managing inflation and economic expectations.
The governor also said improvements in liquidity management,
policy communication, and forward guidance have increased transparency and
strengthened confidence in the economy.
He said while inflation remains elevated and requires close
monitoring, there are early signs of moderation, noting that transparency in
the FX market has improved price discovery and reduced volatility.
Cardoso also said ongoing reforms and improved policy
coordination have strengthened Nigeria’s resilience against external shocks,
including recent geopolitical tensions in the Middle East.
Earlier, Muhammad Sani Abdullahi, deputy governor in charge
of economic policy, said the workshop was organised to promote technical
exchange, structured dialogue, and collaborative engagement on monetary policy
issues.
“The workshop reflects the CBN’s commitment to continuously
improving policy formulation and implementation,” he said.
Abdullahi said the discussions come at a period when
monetary policy decisions are increasingly shaped by domestic economic
realities, global spillovers, and heightened uncertainty.
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