By John Joseph
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The Central Bank of Nigeria (CBN) Governor, Yemi Cardoso, has expressed optimism that the bank’s efforts to curb inflation and foreign exchange pressures will begin to yield results by the first quarter of 2025. This assurance comes on the heels of the Monetary Policy Committee’s (MPC) decision to raise the Monetary Policy Rate (MPR) by 25 basis points to 27.50%.
According to Cardoso, the CBN is committed to deploying every possible strategy to tame inflation, which stood at 33.88% as of October 2024. The bank’s decision to raise the MPR for the sixth time is aimed at addressing rising inflation and stabilizing the foreign exchange market.
The CBN governor emphasized that the bank is resolute in its fight against inflation and will not relent in its efforts to achieve price stability. “We are going to deploy everything in our arsenal to ensure that we are able to tame it,” Cardoso stated.
The MPC’s decision to retain the asymmetric corridor around the MPR at +500/-100 basis points, Cash Reserve Ratio of Deposit Money Banks at 50%, and Merchant Banks at 16%, as well as the Liquidity Ratio at 30%, is also expected to help stabilize the economy.
Cardoso acknowledged that the time lag between policy implementation and impact can be significant, ranging from six to nine months or even a year. However, he expressed confidence that the current measures will yield positive results in the coming months.
In addition to monetary policy measures, the CBN is also working with relevant agencies to address structural impediments to growth. “We are ensuring that we are on top of the game and that the foreign exchange market operates at its most optimal manner to reflect the true value of the currency,” Cardoso said ¹.
Analysts are optimistic that inflationary pressures may begin to moderate in the first quarter of 2025, given the CBN’s commitment to price stability and the expected impact of monetary policy measures ¹. As the CBN continues to work towards achieving its mandate of price and exchange rate stability, Nigerians can expect to see improvements in the economy in the coming months.
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