Cardoso: CBN Policies Averted 42.81% Inflation in 2024

CBN Governor Yemi Cardoso claims the bank’s policies helped prevent inflation from rising to 42.81% in 2024. 

Olayemi Cardoso, the Governor of the Central Bank of Nigeria, stated that without the bank’s policy interventions, inflation could have surged to 42.81 percent by December 2024.

Speaking at the 2025 Monetary Policy Forum, Cardoso also projected that diaspora remittances would increase to N31.79 trillion with the release of fourth-quarter figures for 2024.

The forum also gathered ministers, leaders of economic agencies, and participants from the private sector.

The head of the central bank also promised to adhere to traditional monetary policies to control inflation in 2025.

He mentioned that according to counterfactual estimates, inflation might have soared to 42.81 percent by December 2024 without decisive policy interventions.

He highlighted several bold measures introduced by the CBN in 2024 over six Monetary Policy Committee meetings. These included raising the Monetary Policy Rate by 875 basis points to reach 27.50 percent, boosting the Cash Reserve Ratio for Other Depository Corporations by 1,750 basis points to hit 50.00 percent, and modifying the asymmetric corridor around the MPR.

Cardoso stated that counterfactual estimates indicate inflation might have soared to 42.81 percent by December 2024, had it not been for these decisive policy interventions.

In 2024, the bank adopted a series of bold policy measures during six Monetary Policy Committee meetings. These actions included raising the Monetary Policy Rate by a total of 875 basis points to reach 27.50 percent, boosting the Cash Reserve Ratio for Other Depository Corporations by 1,750 basis points to achieve a level of 50.00 percent, and modifying the asymmetric corridor around the MPR.

The head of the apex bank emphasized that the CBN carried out essential foreign exchange reforms to improve market efficiency.

The consolidation of various exchange rate windows led to a 79.4 percent increase in remittances through International Money Transfer Operators, reaching $4.18 billion in the first three quarters of 2024, compared to $2.33 billion during the same period in 2023.

Additional significant interventions in the foreign exchange sector involved clearing a $7 billion FX backlog, which restored market confidence and enhanced FX liquidity. Restrictions were lifted on 41 items that had been banned from accessing the official FX market since 2015. Additionally, new minimum capital requirements for banks were introduced to take effect in March 2026, aimed at boosting resilience and global competitiveness within the industry.

The central bank also introduced the WIFI initiative as part of the National Financial Inclusion Strategy, designed to close the gender gap in financial access by equipping women with financial services, education, and digital tools.

Regarding inflation, the CBN governor cautioned that effectively managing disinflation in the face of ongoing shocks would demand robust policy coordination between fiscal and monetary authorities.

He emphasized the importance of maintaining price stability, moving forward with transitioning to an inflation-targeting framework, and implementing strategies to restore purchasing power and alleviate economic hardship.

He conveyed optimism that Nigeria was on a positive trajectory and close to achieving disinflation, but emphasized the importance of implementing bold and coordinated policy actions to solidify these advancements.

Cardoso observed that as advanced economies begin to relax their monetary policies, global capital flows to emerging markets might see improvement.

However, he emphasized that Nigeria’s capacity to attract inflows would rely on investor confidence in domestic reforms, macroeconomic stability, and positive real investment returns.

He emphasized once again that the CBN’s shift from unconventional to conventional monetary policies is intended to restore confidence, enhance policy credibility, and prioritize price stability.

Additionally, the Nigeria Foreign Exchange Code was implemented to promote integrity, transparency, and efficiency within the FX market.

Cardoso referred to the code as a binding commitment from the financial sector aimed at restoring trust and enhancing confidence.

He stated that these reforms demonstrate the CBN’s dedication to fostering an environment conducive to inclusive economic growth. He further noted that maintaining macroeconomic stability demands continuous vigilance and a proactive approach to monetary policy.