Olayemi Cardoso, Governor of the Central Bank of Nigeria (CBN), has cautioned against renewed pressure on the apex bank to return to intervention programmes previously implemented by the institution.
CBN
Cardoso said such programmes distorted the bank’s financial position and weakened the effectiveness of monetary policy.
He spoke on Thursday during the opening session of the Monetary Policy Committee (MPC) workshop in Abuja, where participants discussed strategies for strengthening monetary policy effectiveness and achieving sustainable macroeconomic stability.
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According to a statement issued by the CBN on Sunday, Cardoso said the credibility gradually being restored to the apex bank over the past two and a half years was due largely to its return to orthodox monetary policy tools anchored on transparency, discipline and market confidence.
“The credibility we are now rebuilding and the progress achieved over the last two and a half years stem largely from returning to orthodox monetary policy anchored on transparency, policy discipline and market confidence,” he said.
The CBN governor noted that intervention programmes implemented in the past weakened policy transmission mechanisms and blurred the line between fiscal and monetary responsibilities.
He stressed that the apex bank would continue to prioritise transparency, evidence-based policy decisions and institutional reforms aimed at sustaining macroeconomic stability.
Cardoso said the bank had recorded progress in strengthening internal processes and improving policy coordination, adding that decision-making within the institution was increasingly guided by data analysis, technical evaluations and structured deliberations.
He also said the apex bank had improved communication with investors, businesses, financial markets and the public to make monetary policy direction more predictable and easier to understand.
According to him, the reforms are part of the bank’s medium-term transition towards a clearer inflation-targeting framework focused on price stability.
“These efforts are part of our medium-term transition towards a clearer inflation-targeting framework that places price stability at the centre of monetary policy,” he said.
Cardoso said the transition would require deeper institutional reforms, stronger collaboration among economic institutions and sustained technical work.
Reflecting on the challenges inherited by the current management, he said the CBN faced serious institutional and policy difficulties at the beginning of the administration.
According to him, the bank’s autonomy had weakened, confidence in monetary policy had declined and there was excessive dependence on non-conventional monetary tools.
He described the foreign exchange market at the time as opaque and inefficient, while weak coordination between fiscal and monetary authorities reduced the effectiveness of economic policies.
“These structural issues contributed to rising inflation, exchange-rate instability and declining investor confidence,” he said.
Despite the challenges, Cardoso said reforms introduced by the current management had started yielding positive results.
He said the CBN had restored a more orthodox monetary policy framework under the current MPC structure, relying more on traditional policy tools and the Monetary Policy Rate to control inflation and manage economic expectations.
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The governor added that improvements in liquidity management, policy communication and forward guidance had strengthened transparency and boosted investor confidence.
While acknowledging that inflation remained elevated, he said there were early signs of moderation.
Cardoso also noted that reforms in the foreign exchange market had improved price discovery and reduced volatility, while stronger policy coordination had enhanced Nigeria’s resilience to external shocks, including geopolitical tensions in the Middle East.
