"From Double-digit to Single:" CBN Explains How it Will Bring Down Inflation Rate
- The Central Bank of Nigeria has spoken on the strategies it will use to bring inflation rates down to single-digit
- The recently rebased CPI report saw headline inflation drop from 34.8% in December 2024, to 24.48% in January 2025
- The CBN thus relaxed its stance on the monetary policies, retaining the rates and other money parameters
Legit.ng journalist Ruth Okwumbu-Imafidon has over a decade of experience in business reporting across digital and mainstream media.
The Central Bank of Nigeria has disclosed that it has a target to tame inflation and bring it down to single-digit rates.
The CBN Governor, Olayemi Cardoso, made this known at the press conference after the 299th Monetary Policy Committee (MPC) meeting.
Cardoso explained that CBN will stick to orthodox monetary policies as it had done in the past, to curb inflation in Nigeria.
Source: Getty Images
Inflation declines to 24.48% after CPI rebasing
After three weeks of keeping Nigerians waiting, the National Bureau of Statistics (NBS) finally released the rebased CPI report for January 2025.
The report brought in new dynamics with headline inflation down to 24.48% and food inflation at 26%.
NBS explained that the new figures are for January 2025, compared to January 2024 as the base period.
In the press conference on Thursday, CBN Governor Olayemi Cardoso noted that the recent outcome indicates that CBN has taken a positive direction. He added that the committee will remain vigilant and keep monitoring as it implements the strategies.
He said;
“We believe that inflation has been too high for too long. So our objective in the medium to long term is to ensure that we are able to bring this down from the double-digit to the single.”
CBN holds interest rates
In line with predictions from several experts, the CBN held interest rates, ending the policy-tightening era.
Source: Getty Images
The apex bank also retained all other money parameters; MPR at 27.5%; Liquidity Ratio at 30%; the Cash Reserve Ratio of Deposit Money Banks at 50% and Merchant Banks at 16%; and the asymmetric corridor around the MPR retained at +500/-100 basis points.
The MPC noted that it was pleased with the recent macroeconomic developments, especially the stable FX market, the convergence of rates between the Nigeria Foreign Exchange Market (NFEM) and the Bureau de Change (BDC), and the gradual stability seen in PMS price.
The committee added that they will keep monitoring inflation until it is tamed completely, DailyTrust reports.
CBN to adopt orthodox monetary policies
Explaining what this means, an analyst at Norrenberger, Samuel Oyekanmi told Legit.ng that orthodox monetary policy refers to raising interest rates.
He said;
"Orthodox method of taming inflation is hinged on the theory that high interest will lead to drop in inflation"
He, however, did not comment on whether the CBN would go back to raising interest rates in subsequent Monetary Policy Committee meetings.
CBN takes credit for stalling inflation
In related news, the Central Bank governor said that the monetary policy interventions adopted 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 to curb inflation.
CBN Governor, Olayemi Cardoso, also gave an insight into what stance the MPC would be taking against inflation in 2025, saying that it would stick to the orthodox methods.
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Source: Legit.ng
