Tight monetary policy reduced inflation by 10 points – CBN
Nigeria’s sustained monetary tightening has played a central role in slowing inflation, with research estimates showing that the Central Bank of Nigeria’s policy stance accounted for as much as 10 percentage points of the decline in headline inflation, the Governor of the Central Bank of Nigeria and Chairman of the Monetary Policy Committee, Olayemi Cardoso, has said.
This was stated in his personal statement released by the apex bank on its website on Wednesday. Cardoso, in his personal statement at the Monetary Policy Committee meeting held in November 2025, described the outcome as strong counterfactual evidence of the effectiveness of monetary policy despite significant domestic and global headwinds.
He said the findings reinforced the need for bold and consistent actions to preserve price stability.
In the statement, Cardoso said, “Research estimates indicate that our tight policy stance has accounted for up to 10 percentage points of the decline in headline inflation, providing encouraging counterfactual evidence on the effectiveness of monetary policy in the current environment and a reminder of the need to consistently take bold actions.”
Data show that headline inflation declined to 16.05 per cent in October 2025 from 18.02 per cent in September and is now 8.43 percentage points lower than the 24.48 per cent recorded in January 2025.
The CBN governor noted that the disinflation has been broad-based, cutting across headline, food, and core inflation, with momentum strengthening in recent months. According to him, the slowdown reflects reduced foreign exchange volatility, lower food prices, and better-anchored inflation expectations, supported by a relatively stronger naira.
He added that the exchange rate has become significantly less volatile and has shown signs of market-driven appreciation, while foreign reserves have continued to strengthen following reforms that improved capital inflows and triggered structural shifts in Nigeria’s balance of payments.
Beyond inflation, Cardoso said macroeconomic conditions have improved, with rising investor confidence, stronger external buffers, and positive business and household sentiment supporting long-term investment in critical sectors of the economy.
However, he warned that risks to the outlook remain elevated, citing global uncertainties, geopolitical tensions, and Nigeria’s recent designation by the United States as a Country of Particular Concern. He noted that although the designation is rooted in security issues, it could have economic spillover effects.
He also identified the 2026 political cycle as a key domestic risk, given the historical link between pre-election fiscal expansion and inflationary pressures, exchange rate depreciation, and external sector stress.
The CBN governor said fiscal reforms, though necessary, often take time to deliver results and may introduce new challenges in the interim, stressing that monetary policy must remain alert and proactive to prevent any reversal in the disinflationary trend.
Cardoso said deliberations at the November meeting supported maintaining a tight monetary stance, identifying excess system liquidity as a major threat to price stability. He argued that holding policy rates steady would reinforce stability and signal confidence that the current stance is delivering the desired results.
He added that improved anchoring of overnight market rates within the standing facilities corridor shows stronger policy transmission to the wholesale market, providing room for operational adjustments to better manage liquidity conditions.
Based on this assessment, Cardoso supported retaining the Monetary Policy Rate at 27 per cent, adjusting the standing facilities corridor to +50/-450 basis points, maintaining a 45 per cent cash reserve ratio for commercial banks and a 75 per cent CRR on non-TSA public sector deposits, while keeping the liquidity ratio unchanged at 30 per cent.
The Bank of Industry has announced the appointment of Olayinka Mubarak as the Managing Director of BOI Investment & Trust Company Limited, its wholly owned subsidiary.
President Bola Tinubu has approved targeted incentives to unlock Shell’s long-delayed $5bn Bonga South-West deep-offshore oil project. He also directed his Special Adviser on Energy, Olu Verheijen, to facilitate the gazetting of the incentives in line with Nigeria’s existing legal and fiscal frameworks.
Lagos State has taken the lead in the All Progressives Congress, APC, nationwide e-registration exercise, emerging as the state with the highest number of digitally registered members among the 36 states and the Federal Capital Territory.
The Executive Director of Policy and Legal Advocacy Centre, Clement Nwankwo, has said that the Independent National Electoral Commission, INEC, must give notice of at least 360 days before elections.
The Federal High Court in Abuja on Wednesday ordered Bauchi State Commissioner for Finance, Yakubu Adamu, and three others to report weekly to the Department of State Services until the end of their ongoing terror financing trial.
Traders affected by the fire outbreak that razed a commercial storey building at Computer Village in Ikeja Local Government Area of Lagos State have appealed to Governor Babajide Sanwo-Olu for financial assistance to cushion the impact of their losses.
Former Kaduna Central Senator and civil rights advocate, Shehu Sani, has described Canada’s Prime Minister, Mark Carney, as a distinguished global statesman and a moral leader of the Western world.
The Nigerian Meteorological Agency (NiMet) has predicted dust haze and thunderstorms from Thursday to Saturday across the country.
Nigerians spent an estimated N1.58tn on petrol in December 2025, based on official fuel consumption data released by the Nigerian Midstream and Downstream Petroleum Regulatory Authority.