The Central Bank of Nigeria (CBN) has acknowledged the persistently high inflation rate in the country but expressed optimism about the effectiveness of its monetary policies in addressing the economic challenges.
Speaking at the 2024 Annual Bankers’ Dinner organized by the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos, CBN Governor Olayemi Cardoso said headline inflation rose to 33.88% in October from 32.70% in September, according to the National Bureau of Statistics (NBS). He assured that a downward inflation trend is expected by 2025 as the full impact of monetary policies unfolds.
“We understand the burden of higher interest rates on families and businesses, but these measures are temporary. As inflation improves, adjustments will be made. Early indications suggest positive changes, and we anticipate a gradual decline in 2025,” Cardoso said, adding that monetary policy effects typically take six to nine months to reach consumers.
Addressing exchange rate concerns, the governor dismissed speculations about a demand-supply gap in the foreign exchange (FX) market and argued that the current exchange rate does not reflect Nigeria’s true market value. “The dollar exchange rate represents what desperate buyers are willing to pay, which isn’t reflective of the real market situation,” he said.
Cardoso announced plans to introduce an electronic FX matching system to enhance market efficiency and pledged the CBN’s commitment to maintaining a strong financial buffer to meet the country’s economic needs.
CIBN Chairman, Prof. Pius Olanrewaju, highlighted the banking sector’s resilience amid inflationary pressures, exchange rate fluctuations, and recapitalization efforts. He noted that Nigeria’s economy demonstrated steady growth in 2024, moving from 2.98% in Q1 to 3.46% in Q3, underscoring the country’s march toward achieving a $1 trillion economy by 2030.
