Cardoso recommits to orthodox monetary policy, transparency

By Emma Ujah

The Governor of the Central Bank of Nigeria, Olayemi Cardoso, has reaffirmed the apex bank’s commitment to orthodox monetary policy, transparency and evidence-based decision-making, warning against renewed calls for interventionist programmes.

Speaking at the opening of the Monetary Policy Committee workshop in Abuja, Mr Cardoso said: “The ongoing reforms are critical to restoring confidence in the Nigerian economy and strengthening macroeconomic stability.”

Reflecting on the state of the economy at the inception of the current administration, he said the bank inherited “weakened institutional autonomy, reduced policy credibility, and reliance on unorthodox monetary tools.”

According to him, “the challenges blurred the distinction between fiscal and monetary responsibilities, reduced transparency, and limited the effectiveness of policy interventions.”

He added: “The foreign exchange market was opaque and inefficient, while weak fiscal-monetary coordination further constrained economic outcomes.”

The CBN governor said the structural distortions contributed to “rising inflationary pressures, exchange-rate volatility, and erosion of investor and public confidence,” but stressed that reforms introduced by the current management were reversing the trend.

“We have restored a more orthodox approach to monetary policy under the current MPC framework, with renewed emphasis on conventional instruments and the policy rate as the primary signalling tool,” he stated.

Mr Cardoso further said: “Improvements in liquidity management, forward guidance and policy communication have enhanced transparency and helped anchor expectations among households, businesses and investors.”

According to him, “inflation, while still elevated and requiring close monitoring, has begun to moderate, while exchange-rate stability has improved.”

Reiterating the bank’s stance, he cautioned against interventionist measures, saying: “Such programmes previously distorted the Bank’s balance sheet. The institution’s renewed credibility over the past two and a half years has largely stemmed from disciplined reliance on conventional policy tools.”

He added: “Decision-making processes are increasingly anchored in data-driven analysis and structured deliberation, while communication practices have become more consistent and predictable.”

The governor also reaffirmed the apex bank’s commitment to “transparency, evidence-based policymaking and institutional strengthening” as key pillars for achieving sustainable macroeconomic stability.

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