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