The Central Bank of Nigeria (CBN) has acknowledged that the country’s inflation rate remains unacceptably high but expressed optimism that its monetary policies will help improve the economic situation,Daily Trust reports.
CBN Governor Olayemi Cardoso made this statement at the 2024 Annual Bankers’ Dinner organized by the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos.
According to the National Bureau of Statistics (NBS), Nigeria’s headline inflation rate climbed to 33.88% in October, up from 32.70% in September. While expressing concern over the persistent inflation, Cardoso projected a decline in 2025.
“I fully understand the challenges that higher interest rates impose on businesses and families. However, these measures are not permanent. We are closely monitoring the data, and as inflation shows sustained improvement—which we anticipate soon—we will adjust rates accordingly,” he said.
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Cardoso added, “Our tight monetary policy stance has shifted the previous downward trajectory. Although inflation remains high, early indicators suggest improvement, considering that monetary policy effects typically take six to nine months to fully impact the economy.”
On the foreign exchange market, the CBN Governor refuted the current naira-to-dollar exchange rate, asserting it does not represent the true market value.
“There’s a lot of misinformation about a supposed demand-supply gap in the FX market, fueling unnecessary panic. The current exchange rate reflects the desperation of buyers rather than the actual market value of the naira,” he explained.
To improve market stability, Cardoso announced the introduction of an electronic foreign exchange matching system, a strategy that has proven effective in other markets.
Additionally, the CBN Governor emphasized the commission’s commitment to maintaining a robust cash reserve to meet Nigeria’s financial needs. He was conferred as a fellow of the institute alongside Lagos State Governor Babajide Sanwo-Olu during the event.
In his remarks, the Chairman of CIBN, Prof. Pius Olanrewaju, highlighted the resilience of Nigeria’s economy and banking industry in 2024.
“The Nigerian economy has demonstrated agility, with steady growth from 2.98% in Q1 to 3.19% in Q2, and now 3.46% in Q3 of 2024. The banking industry has also withstood macroeconomic pressures like inflation and exchange rate fluctuations,” he said.
Olanrewaju further noted the progress made in bank recapitalization, describing it as a key step towards strengthening the financial sector and achieving the $1 trillion economy goal by 2030.
