The Central Bank of Nigeria (CBN) has revealed that without its decisive interventions, Nigeria’s inflation rate would have surged to an alarming 42.81% by the end of 2024. CBN Governor, Mr. Olayemi Cardoso, disclosed this at the 2025 Monetary Policy Forum, where he emphasized the role of the apex bank’s policies in stabilizing the economy during a turbulent year.The CBN implemented bold measures, including a series of interest rate hikes and adjustments to the cash reserve ratio, to curb the inflationary pressures that threatened to spiral out of control.
Cardoso highlighted the bank’s interventions, which included raising the Monetary Policy Rate (MPR) by 875 basis points to 27.50% and increasing the Cash Reserve Ratio (CRR) to 50%.These actions were part of a larger strategy to manage Nigeria’s monetary policy effectively in the face of inflationary challenges. The governor reaffirmed the CBN’s commitment to using orthodox monetary policies to maintain price stability in 2025 and beyond, despite ongoing economic uncertainties.One of the significant outcomes of the CBN’s policies has been a remarkable rise in diaspora remittances. Cardoso noted that remittances through International Money Transfer Operators (IMTOs) surged by 79.4% in 2024, reaching $4.18 billion by the third quarter, compared to $2.33 billion in 2023.
This growth has been bolstered by the bank’s efforts to streamline the foreign exchange market, which included clearing a backlog of $7 billion in foreign exchange commitments and lifting restrictions on 41 items from the official FX market.The CBN’s efforts have also extended to promoting financial inclusion, particularly among women. The bank launched the Women’s Financial Inclusion Initiative (WIFI) under the National Financial Inclusion Strategy, aiming to reduce the gender gap in financial access. In addition, the CBN introduced the Nigeria Foreign Exchange Code to enhance transparency and trust in the FX market, which has helped stabilize the naira and improve market confidence.
Looking ahead, the CBN remains focused on sustaining its disinflationary efforts. While acknowledging that external factors such as persistent global economic shocks have made achieving a single-digit inflation target challenging, Cardoso expressed optimism that Nigeria is on the right track. He emphasized the need for continued coordination between fiscal and monetary authorities to anchor inflation expectations and maintain investor confidence.The reforms implemented by the CBN are already showing positive signs, especially in the foreign exchange market, where the exchange rate premium has narrowed significantly.
