CBN’s Tight Monetary Policy Cuts Inflation by 10 Points, Governor Cardoso Confirms
Nigeria’s sustained monetary tightening has played a key role in reducing inflation, with the Central Bank of Nigeria (CBN) confirming that its policies contributed up to 10 percentage points of the decline in headline inflation. Governor Olayemi Cardoso, who also chairs the Monetary Policy Committee (MPC), released a statement highlighting the effectiveness of the central bank’s strategy despite ongoing domestic and global economic headwinds.
According to data from the CBN, headline inflation dropped to 16.05% in October 2025 from 18.02% in September, and is now 8.43 points lower than the 24.48% recorded at the start of the year. Governor Cardoso noted that this broad-based disinflation spans headline, food, and core inflation, fueled by lower food prices, reduced foreign exchange volatility, and a stronger naira.
The CBN governor also pointed to stabilizing foreign reserves and a less volatile exchange rate as signs that structural reforms and improved capital inflows are strengthening Nigeria’s macroeconomic fundamentals. Investor confidence has risen, while businesses and households are showing improved sentiment, which could support long-term investment in critical sectors of the economy.
Despite these gains, Cardoso warned that risks remain high. Global uncertainties, geopolitical tensions, and Nigeria’s recent designation by the U.S. as a Country of Particular Concern could have economic spillovers. Domestically, the upcoming 2026 political cycle may also pressure fiscal policy, potentially influencing inflation, exchange rates, and the external sector.
To safeguard progress, the MPC voted to maintain its tight monetary stance, keeping the benchmark interest rate at 27% and adjusting key liquidity ratios to manage excess system liquidity. Cardoso emphasized that while monetary policy alone cannot guarantee sustainable growth, the current strategy is essential for price stability and for creating the conditions necessary for broader structural reforms over time.
source: punch