The Central Bank of Nigeria’s Governor, Olayemi Cardoso, has stated that the country’s inflation rate is expected to continue its downward trend, driven by tight monetary conditions, a stable Naira, and an increase in food supply. This announcement was made at the ongoing annual meetings of the International Monetary Fund and the World Bank Group in Washington DC, United States.
According to the Central Bank of Nigeria, the country’s inflation rate dropped to 18.02 percent in September, marking the sixth consecutive decline and the lowest rate in three years. Cardoso attributed this decline to the bank’s decisive monetary policy actions, which have helped restore price stability and anchor expectations. The inflation rate has significantly decreased from its peak of 34.19 percent in June 2024.
The Central Bank of Nigeria’s Monetary Policy Committee recently eased its monetary policy stance, lowering the interest rate by 50 basis points to 27.00 percent and the cash reserve ratio for commercial banks to 45 percent. This move aims to maintain a firm anti-inflationary stance while supporting economic growth. Additionally, the bank’s reforms in the foreign exchange market, including exchange rate unification and enhanced transparency, have improved price discovery and stabilized the Naira.
The spread between the official and Bureau de Change rates has narrowed to below 2 percent, indicating increased stability in the foreign exchange market. Improved liquidity in the FX market has also helped reduce the pass-through of imported inflation, reinforcing price stability. The country’s foreign reserves remain robust, ranging between $42.67 billion and $43 billion, providing over eleven months of forward import cover.
The Central Bank of Nigeria remains committed to strengthening the disinflation trend, supported by a combination of exchange rate stability, durable improvements in food supply, and continued moderation in petroleum product prices. The bank’s efforts aim to ensure a stable economic environment, which is essential for sustainable growth and development. As the country continues to navigate its economic challenges, the Central Bank of Nigeria’s policies and actions will be crucial in shaping the nation’s economic future.