CBN’s Policy Interventions Stopped Inflation From Hitting 42.81%

The Central Bank of Nigeria (CBN) has said except for its disciplined and coordinated approach to monetary policy interventions focused on restoring stability in the financial market and supporting the national economy, Nigeria’s inflation rate would have reached 42.81 per cent rate as of December 2024.

Nigeria has been battling high inflationary pressures which experts say erodes purchasing power, discourages investment, and exacerbates inequality. The country’s Inflation rose to 34.80 per cent in December 2024, a figure the central bank said would have been higher.

The Monetary Policy Committee had initiated a tightening cycle using orthodox approaches. Throughout 2024, the apex bank implemented several policy measures across six MPC meetings, including raising the Monetary Policy Rate (MPR) by a cumulative 875 basis points to 27.50 per cent, increasing the Cash Reserve Ratio (CRR) of Other Depository Corporations (ODCs) by 1750 basis points to 50.00 percent, and adjusting the asymmetric corridor around the MPR.

“Counterfactual estimates suggest that without these decisive policy interventions, inflation could have reached 42.81 percent by December 2024,” CBN governor, Olayemi Cardoso told the audience at the 2025 Monetary Policy Forum themed “Managing Disinflation Process” on Thursday in Abuja.

Cardoso also said the CBN will now increase its surveillance over the Nigerian market to strengthen investors’ confidence and sustain the recent gains, including stability in the foreign exchange market with a focus on creating an enabling environment for inclusive economic development.

Cardoso said managing the disinflation process requires a careful balance of policies that mitigate short-term costs while anchoring long-term stability. He said the CBN is fully committed to ensuring price stability while minimising adverse effects on growth and livelihoods.

Cardoso, who said Nigeria will soon experience a decline in inflation figures, said managing disinflation amidst persistent shocks requires not only robust policies but also coordination between fiscal and monetary authorities to anchor expectations and maintain investor confidence. “Our focus must remain on price stability, the planned transition to an inflation-targeting framework, and strategies to restore purchasing power and ease economic hardship.”