Monetary Reforms Drive Inflation Decline and Forex Stability in Nigeria, Says CBN

The Central Bank of Nigeria (CBN) has announced that the country’s economy is steadily recovering, citing a sharp drop in inflation, renewed foreign exchange stability, and a rebound in external reserves as key indicators. The central bank attributes these positive developments to the adoption of orthodox monetary policies and a series of coordinated reforms implemented over the past two years.

Emem Usoro, CBN’s Deputy Governor of Corporate Services, explained at a financial journalists’ seminar that initiatives such as stronger corporate governance, tighter compliance frameworks, and ongoing bank recapitalisation efforts have been central to restoring confidence in the financial system. “These measures have reversed macroeconomic distortions and supported a stable economic environment,” she said.

When the current CBN management assumed office, Nigeria faced high inflation, volatile exchange rates, dwindling reserves, and a significant foreign exchange backlog, which forced reliance on Ways and Means financing. Usoro emphasized that returning to disciplined, market-driven policy tools was crucial in stabilizing the economy. Today, inflation has fallen to 16.05%, the Naira remains steady below N1,005, and external reserves have surpassed $46 billion, covering over 10 months of imports.

Experts at the seminar highlighted the importance of aligning monetary and fiscal policies to maintain long-term stability. Prof. Ken Ife of the ECOWAS Commission stressed that fiscal dominance and uncoordinated government spending inject excessive liquidity, fueling inflation. Similarly, Dr. Afangideh Udoma Johnson of the CBN noted that fiscal prudence combined with disciplined monetary management creates a foundation for a resilient financial system.

Despite the progress, the CBN warns that more work is needed to strengthen macroeconomic fundamentals and improve living standards for Nigerians. Usoro called for continued public engagement and collaboration between fiscal and monetary authorities to ensure that reforms translate into sustained economic growth and financial stability.

source: Leadership