Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has reiterated that the apex bank will maintain its monetary tightening stance for the foreseeable future, stressing that the policy remains critical to taming inflation and stabilizing the naira.
Speaking at an economic forum in Abuja on Monday, Cardoso explained that despite recent signs of recovery in the foreign exchange market and improved liquidity, inflationary pressures remain elevated, requiring consistent intervention from the monetary authority.
“Our tightening measures are deliberate. They are aimed at reining in inflation, stabilizing the exchange rate, and restoring investor confidence. While we are seeing positive trends, easing too early could reverse the progress made,” Cardoso said.
Nigeria’s inflation rate climbed to 33.8 percent in July, the highest in decades, driven largely by high food prices and the ripple effects of fuel subsidy removal and naira depreciation.
Cardoso noted that successive hikes in the Monetary Policy Rate (MPR), currently at 26.75 percent, have started to moderate speculative demand for foreign exchange and reduce liquidity-driven inflation.
He assured that the CBN would continue to balance price stability with growth considerations, adding that complementary fiscal reforms from the federal government would be critical to sustaining the gains of the monetary policy.
Financial analysts have described the CBN’s stance as “necessary but painful,” warning that while it may help slow inflation, it could also raise borrowing costs for businesses.
Cardoso, however, maintained that the long-term benefits outweigh the short-term costs: “A stable macroeconomic environment is what will ultimately attract investments, create jobs, and ensure growth. That is the direction we are heading.”
