The Central Bank of Nigeria (CBN) has reiterated its confidence that the naira will stabilize as investor confidence strengthens. CBN Governor Yemi Cardoso made this assertion during the Monetary Policy Forum (MPF) in Abuja, where he engaged external stakeholders on the country’s economic outlook.
Addressing concerns over recent currency fluctuations, Cardoso acknowledged that the naira had experienced volatility but assured that it was moving towards stability. He emphasized that the exchange rate is now more reflective of its actual value, making Nigeria’s currency more competitive in the global market.
He further noted an increase in international investor interest, attributing it to ongoing economic reforms and policy adjustments. “It is very important to recognize that, from the perspective of the international community and investors, the naira is at a point where it is now more competitive,” he said.
Cardoso stressed the need for collaboration among policymakers, the private sector, and civil society to drive meaningful economic change. He described the forum as an essential platform for discussing monetary policy formulation, implementation, and outcomes. Unlike broad economic summits, the MPF focuses on precision-driven discussions to tackle Nigeria’s monetary challenges and improve policy effectiveness.
One of the key highlights of Cardoso’s address was the progress in Nigeria’s foreign exchange market. He pointed out that exchange rate disparities had narrowed, and external reserves had risen to over $40 billion by December 2024. This increase, he said, was organic, indicating a healthier financial position for the country.
“So, not only do we have a higher reserve number in relative terms, but also the health of our reserve level is much stronger and more bolstered,” Cardoso explained.
Speaking on inflation control, CBN Deputy Governor for Economic Policy, Muhammad Abdullahi, elaborated on the tightening measures implemented by the apex bank to combat inflationary pressures. He outlined key monetary policy tools, including adjustments to the monetary policy rate (MPR) and cash reserve requirements (CRR), which had been crucial in stabilizing the economy.
By December 2024, the CBN had raised the MPR to 27.5%, marking a cumulative increase of 875 basis points. The CRR for depository corporations was raised to 50%, while that of merchant banks was set at 16%, with the liquidity ratio maintained at 30%.
“These decisive measures were necessary to address inflationary pressures and stabilize prices, which are critical to maintaining the confidence of market participants,” Abdullahi explained.
Beyond monetary policies, economic stability is also being influenced by improvements in national security. Minister of Budget and National Planning, Abubakar Bagudu, highlighted how relative peace in conflict-prone areas such as Borno, Kaduna, and Sokoto has contributed to an increase in food production.
According to Bagudu, better security conditions have allowed farmers to return to their fields, helping to ease food shortages and stabilize prices. This development is expected to have a positive impact on inflation, which has been a major concern for both policymakers and the general public.
With Nigeria’s external reserves strengthening, exchange rate volatility easing, and inflation control measures in place, the CBN remains optimistic about long-term economic stability. However, experts warn that sustained efforts in policy implementation, infrastructure development, and investor-friendly regulations will be crucial in maintaining growth.
As Nigeria continues its economic recovery, stakeholders are closely watching the effectiveness of these measures in restoring investor confidence and ensuring that the country’s financial system remains resilient.
