Cardoso reaffirms dedication to traditional monetary strategy, openness

Governor of the Central Bank of Nigeria, Mr Olayemi Cardoso, has underscored the bank's dedication to upholding traditional monetary policies, transparency, and decision-making rooted in empirical evidence, while cautioning against revived appeals for interventionist programs.

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At the Monetary Policy Committee workshop in Abuja, Mr Cardoso emphasized that ongoing reforms are vital for reviving confidence in the Nigerian economy and bolstering macroeconomic stability.

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Reflecting on the state of the economy when the current administration took office, he noted that the bank inherited a legacy of diminished institutional autonomy, reduced policy credibility, and an over-reliance on unorthodox monetary tools.

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According to him, these challenges led to a blurring of lines between fiscal and monetary responsibilities, diminished transparency, and limited the effectiveness of policy interventions, with the foreign exchange market being particularly opaque and inefficient.

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The CBN governor observed that weak fiscal-monetary coordination further constrained economic outcomes, contributing to rising inflationary pressures, exchange-rate volatility, and a decline in investor and public confidence.

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However, Mr Cardoso stressed that reforms introduced by the current management are reversing this trend, with the bank adopting a more orthodox approach to monetary policy under the current MPC framework.

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This approach, he explained, places renewed emphasis on conventional instruments and the policy rate as the primary signalling tool, while improvements in liquidity management, forward guidance, and policy communication have enhanced transparency and helped anchor expectations.

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As a result, inflation, although still elevated, has begun to moderate, and exchange-rate stability has improved, according to Mr Cardoso.

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Reiterating the bank's stance, he warned against interventionist measures, which he said had previously distorted the Bank's balance sheet, and instead emphasized the importance of disciplined reliance on conventional policy tools.

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Decision-making processes, he noted, are now increasingly grounded in data-driven analysis and structured deliberation, with communication practices becoming more consistent and predictable.

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The governor reaffirmed the apex bank's commitment to transparency, evidence-based policymaking, and institutional strengthening as essential pillars for achieving sustainable macroeconomic stability.