CBN Takes Credit for Curbing Inflation Rate That Could Have Exceeded 42.81 Per Cent
- The Central Bank governor has said that its monetary policy interventions prevented inflation from reaching 42.81% in December 2024
- Amid several challenging local and global shocks in 2024, the monetary policy committee took bold decisions in the interest of the country
- CBN Governor, Olayemi Cardoso, also gave an insight into what stance the MPC would be taking against inflation in 2025
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Legit.ng journalist Ruth Okwumbu-Imafidon has over a decade of experience in business reporting across digital and mainstream media.
Inflation could have reached 42.81% in December 2024 but for the Central Bank of Nigeria's (CBN) monetary policy interventions.
This is according to CBN Governor, Olayemi Cardoso.
Cardoso explained that there are counterfactual estimates to prove that the CBN’s policy interventions stopped inflation from hitting the roof.
The CBN governor made this known at the first 2025 Monetary Policy Forum on Thursday, January 30, 2025, in Abuja, an event that had the heads of economic agencies in Nigeria, ministers, and private sector participants.
Source: Getty Images
NBS data shows inflation surged to 34.80%
According to the latest report from the National Bureau of Statistics (NBS), headline inflation by the close of 2024 had reached 34.80%.
A key driver of this figure was food inflation, which also hit 39.84% by the close of the year with more than half the states having inflation figures above 40%.
Cardoso noted that 2024 featured persistent inflationary pressures triggered by both local and global shock factors and that a proactive monetary policy stance will be sustained in 2025.
According to a Daily Trust report, Cardoso reassured stakeholders that the CBN would continue to ensure monetary stability, by ensuring strong policy coordination between the monetary and fiscal authorities.
CBN raises interest rates to 27.50%
Cardoso noted the committee had to make bold decisions during the year, including raising the benchmark interest rate by 875 basis points to 27.50% by November 2024.
The CBN governor promised that in 2025, the body would apply only orthodox monetary policies to tame inflation.
They also implemented policy measures that increased the Cash Reserve Ratio for Other Depository Corporations by 1,750 basis points to 50.00% and adjusted the asymmetric corridor around the MPR.
Remittances through International Money transfer operators also went up by 79.4% to $4.18 billion in the first nine months of 2024, thanks to the unification of the multiple FX rates windows
Diaspora remittances and FX backlog
The apex bank governor was optimistic that the release of Q4 2024 figures would show further growth in diaspora remittances, up to N31.79 trillion.
Another major intervention was clearing the $7 billion FX backlog, improving FX liquidity and restoring investor confidence in the Nigerian market, according to Cardoso.
The MPC also lifted restrictions on 41 items granting them access to the official market for the first time since 2015; and set a new minimum capital requirement for banks.
Headline inflation hits 34.8% in December 2024
In related news, Legit.ng reported that Nigeria's headline inflation had hit 34.8% in December 2024.
This was contained in the last Consumer Price Index (CPI) report released by the NBS. This report was released on the same day the NBS website was restored back online, one month after hackers took over the site.
Inflation was up 0.20% higher than the 36.6% recorded in November 2024. Food inflation however declined from 39.93% in November 2024 to 39.8% in December 2024.
Proofreading by James, Ojo Adakole, journalist and copy editor at Legit.ng.
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Source: Legit.ng
