The Central Bank of Nigeria has doubled down on its market-driven monetary reforms, insisting that the country cannot afford a return to intervention-heavy policies that once weakened confidence in the financial system and blurred the lines between fiscal and monetary management.
Speaking at the opening session of a Monetary Policy Committee workshop held on May 21, 2026, CBN Governor Olayemi Cardoso said the apex bank’s renewed commitment to orthodox monetary policy was already helping to restore stability and credibility to the Nigerian economy.
The workshop, themed “Strengthening Monetary Policy Effectiveness Towards Sustainable Macroeconomic Stability,” brought together MPC members, deputy governors, directors and financial experts to examine how monetary policy can remain effective amid global uncertainty and evolving domestic economic realities.
Cardoso used the occasion to reflect on the state of the central bank when the current administration assumed office, describing an institution weighed down by weak policy credibility, reduced autonomy and dependence on unorthodox interventions.
According to the CBN, the governor noted that excessive interventionist programmes in the past distorted the apex bank’s balance sheet and weakened the effectiveness of monetary policy tools.
“These challenges blurred the distinction between fiscal and monetary responsibilities, reduced transparency, and limited the effectiveness of policy interventions,” the statement quoted Cardoso as saying.
He further observed that the foreign exchange market had become opaque and inefficient, while poor coordination between fiscal and monetary authorities constrained economic outcomes and deepened macroeconomic instability.
The central bank said those structural weaknesses contributed significantly to surging inflation, exchange-rate volatility and declining investor confidence.
However, Cardoso maintained that the reforms introduced under the current leadership were beginning to reverse those trends.
The governor said the bank had restored a more orthodox framework to monetary management, placing greater reliance on conventional instruments and using the Monetary Policy Rate as its primary signalling mechanism.
According to the CBN, improvements in liquidity management, policy communication and forward guidance have also enhanced transparency and helped businesses, households and investors form more stable economic expectations.
“Inflation, while still elevated and requiring close monitoring, has begun to moderate, and exchange-rate stability has improved,” the statement said.
The apex bank added that increased transparency in the foreign exchange market had improved price discovery, reduced volatility and gradually restored confidence among market participants.
Cardoso also linked Nigeria’s growing resilience to external economic shocks — including recent geopolitical tensions in the Middle East — to the ongoing reforms and stronger policy coordination.
Beyond headline economic indicators, the CBN governor highlighted efforts to strengthen the institution internally. He said decision-making within the bank was increasingly guided by data-driven analysis and structured deliberation, while communication with the public had become more consistent and predictable.
The bank noted that these reforms align with its medium-term objective of transitioning toward a more explicit inflation-targeting framework, although Cardoso acknowledged that such a shift would require deeper institutional reforms and sustained technical work.
The governor also pointed to the recently concluded banking recapitalisation exercise as an example of effective collaboration between regulators, financial institutions and stakeholders.
While reaffirming the bank’s commitment to disciplined monetary management, Cardoso cautioned strongly against renewed pressure for interventionist policies.
“The institution’s renewed credibility over the past two and a half years has largely stemmed from its disciplined reliance on conventional policy tools,” the statement quoted him as saying.
He stressed that transparency, evidence-based policymaking and institutional strengthening would remain central to the CBN’s long-term strategy for achieving sustainable macroeconomic stability.
Cardoso expressed confidence that discussions at the workshop would generate practical recommendations capable of improving monetary policy implementation and supporting long-term economic growth.
Earlier in his welcome address, Deputy Governor for Economic Policy Muhammad Abdullahi underscored the importance of inclusive participation in monetary policy discussions.
According to the statement, Abdullahi said the workshop drew facilitators from policy circles, academia, research institutions and professional practice, noting that such diversity was essential for rigorous analysis and informed engagement.
He described the workshop as a platform for technical exchange, structured dialogue and shared learning at a time when monetary policy decisions are increasingly shaped by global spillovers, domestic pressures and heightened uncertainty.
The two-day event featured technical sessions led by experts in monetary policy and financial markets, with discussions centred on policy transmission mechanisms, financial market development, institutional processes and analytical frameworks tailored to Nigeria’s economic realities.