Central Bank reiterates pledge to curb price rises, aims for 6-9% inflation rate

The Central Bank of Nigeria has reaffirmed its dedication to implementing an inflation-targeting monetary policy framework, with the primary objective of guiding headline inflation into a 6–9 percent range, as stated by the Bank's Deputy Governor in charge of Economic Policy, Dr. Muhammad Abdullahi.

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Dr. Abdullahi made this announcement during a strategic session with the Nigerian Economic Society and the academic community in Abuja, where he described the shift towards inflation targeting as a significant move towards a transparent and rules-based monetary policy system.

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The inflation-targeting framework is designed to guide market expectations, mitigate the impact of supply-side shocks, and enhance the transparency, accountability, and credibility of monetary policy, according to Dr. Abdullahi.

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He emphasized that stabilizing inflation expectations plays a crucial role in reducing risk premia, supporting long-term investment plans, and enabling policymakers to focus on issues beyond short-term disruptions.

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The CBN's return to orthodox monetary policy tools, withdrawal from quasi-fiscal activities, and strengthened institutional independence are among the key reforms supporting the transition to an inflation-targeting framework, Dr. Abdullahi noted.

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Major foreign exchange market reforms, including rate unification and electronic trading platforms, have also contributed to reduced volatility and enhanced price discovery, he added.

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Improvements in bank recapitalization, prudential oversight, and coordination with fiscal authorities have been critical in stabilizing the financial sector and ensuring coherent monetary operations, according to Dr. Abdullahi.

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These reforms have resulted in a significant decline in headline inflation, from 34.8 percent in late 2024 to 15.1 percent by early 2026, Dr. Abdullahi pointed out.

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Looking ahead, Dr. Abdullahi stressed that sustained policy discipline, anchored expectations, and a credible institutional framework are essential to achieving the medium-term inflation target of 6–9 percent, barring major external shocks.

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Earlier, Dr. Victor Oboh, Director of the Monetary Policy Department at CBN, reaffirmed the Bank's commitment to collaborating with the Nigerian Economic Society to enhance policy effectiveness and macroeconomic stability.

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Dr. Baba Yusuf Musa, NES President and Chairman, commended the CBN for its openness and reform-minded approach, pledging the Society's support in advancing evidence-based monetary policy, and stating that "Nigeria needs a credible Central Bank, and the Nigerian Economic Society needs a Central Bank worth standing with."

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The session highlighted the CBN's focus on deepening engagement with academics and researchers to ensure robust, transparent, and forward-looking monetary policy decisions.