The Governor of the Central Bank of Nigeria, Olayemi Cardoso, has strongly defended the bank’s shift back to orthodox monetary policy, cautioning against renewed pressure to reintroduce intervention-style programmes that he said previously weakened the institution’s balance sheet and reduced policy efficiency.
Speaking at the opening of a Monetary Policy Committee workshop held on May 21, 2026, Cardoso reaffirmed the CBN’s commitment to transparency, evidence-based decision-making, and conventional monetary tools as the foundation for ongoing economic reforms.
The workshop, themed “Strengthening Monetary Policy Effectiveness Towards Sustainable Macroeconomic Stability,” brought together MPC members, senior officials, and financial experts to assess ways of improving policy performance in the face of both local and global economic pressures.
Cardoso reviewed recent challenges in Nigeria’s monetary system, noting that the bank had previously operated under weakened autonomy, reduced credibility, and heavy reliance on unconventional policy measures. He explained that this blurred the line between fiscal and monetary roles, reduced transparency, and contributed to inefficiencies in the foreign exchange market.
According to him, these structural issues fuelled inflationary pressure, exchange-rate instability, and declining confidence among investors and the public.
He, however, said reforms introduced under the current leadership have started to reverse these trends, with a renewed focus on orthodox policy tools and the Monetary Policy Rate serving as the main signalling instrument.
The CBN governor noted improvements in liquidity management, communication, and policy guidance, saying these have helped stabilise expectations and improve transparency in the foreign exchange market. He added that inflation is beginning to ease, while exchange-rate conditions have shown signs of improved stability.
Cardoso also pointed to growing economic resilience to external shocks, crediting ongoing reforms and better policy coordination for helping the economy withstand global uncertainties.
He further highlighted improvements in the bank’s internal decision-making process, stressing that policy formulation is now more data-driven, structured, and consistent in communication.
Looking ahead, he said the CBN is working toward a more explicit inflation-targeting framework, which would require deeper institutional reforms and stronger coordination across economic agencies.
The governor also cited the recent banking recapitalisation exercise as an example of successful coordination and supervision within the financial sector.
Reiterating his position, Cardoso warned against returning to interventionist programmes, insisting that such policies previously distorted the bank’s balance sheet. He maintained that the CBN’s renewed credibility has been built on discipline and reliance on standard monetary tools.
He expressed confidence that the workshop would produce practical solutions to further strengthen monetary policy implementation and support sustainable economic growth.
