Cardoso recommits to orthodox monetary policy, transparency
Central Bank Governor Reaffirms Commitment to Orthodox Monetary Policies
By Emma Ujah
ABUJA — Olayemi Cardoso, the Governor of the Central Bank of Nigeria (CBN), has reiterated the bank’s dedication to orthodox monetary policies, transparency, and evidence-based decision-making. He cautioned against renewed calls for interventionist programs that could disrupt economic stability.
During the opening of a Monetary Policy Committee workshop in Abuja, Cardoso highlighted the ongoing reforms as vital for restoring confidence in Nigeria’s economy and enhancing macroeconomic stability. He noted that the current administration inherited significant challenges, including weakened institutional autonomy, diminished policy credibility, and an over-reliance on unorthodox monetary tools.
“Challenges blurred the distinction between fiscal and monetary responsibilities, reduced transparency, and limited the effectiveness of policy interventions,” Cardoso stated. He described the foreign exchange market as previously opaque and inefficient, with weak fiscal-monetary coordination hindering economic performance.
The governor pointed to structural distortions that have led to rising inflation pressures, exchange-rate volatility, and a decline in investor confidence. However, he emphasized that reforms implemented by the current management are reversing these trends.
“We have restored a more orthodox approach to monetary policy, focusing on conventional instruments and using the policy rate as the primary signaling tool,” he said.
Cardoso noted that improvements in liquidity management, forward guidance, and policy communication have enhanced transparency, helping to anchor expectations among households, businesses, and investors. He acknowledged that while inflation remains high and requires monitoring, there are signs that it is beginning to moderate, and exchange-rate stability is improving.
He reiterated the bank’s resistance to interventionist measures, citing that such programs previously distorted the Bank’s balance sheet. Cardoso stated that the institution’s regained credibility over the past two and a half years largely results from adhering to conventional policy tools.
Decision-making, he added, is increasingly informed by data-driven analysis and structured deliberation, leading to more consistent and predictable communication practices.
The governor reaffirmed the CBN’s commitment to transparency, evidence-based policymaking, and institutional strengthening as key pillars for achieving sustainable macroeconomic stability.
