Sustained inflation decline shows effectiveness of CBN’s policy measures — Cardoso

Nigeria’s inflation rate continued its downward trajectory in September 2025, easing to 18.02 percent, the lowest level in three years, in what the Central Bank of Nigeria (CBN) described as a clear reflection of the impact of its sustained monetary tightening and market reforms.

The latest figures from the National Bureau of Statistics (NBS) show that headline inflation has now declined for six consecutive months, marking a significant reversal from the peak of 34.19 percent recorded in June 2024.

CBN Governor, Olayemi Cardoso, said the consistent drop demonstrates the effectiveness of the Bank’s measures aimed at restoring price stability and anchoring inflation expectations.

“In response to earlier price pressures, the Bank raised the Monetary Policy Rate (MPR) from 18.75 percent to 27.50 percent through a sustained tightening cycle, alongside an increase in the Cash Reserve Ratio (CRR) to 50 percent for commercial banks and 16 percent for merchant banks,” Cardoso explained.

He added that at its September 2025 meeting, the Bank slightly relaxed its stance by reducing the MPR by 50 basis points to 27.00 percent and the CRR for commercial banks to 45 percent, while maintaining a firm anti-inflationary posture.

Cardoso also highlighted that the monetary policy adjustments were reinforced by foreign exchange market reforms, including exchange rate unification and improved transparency to enhance price discovery.

These efforts, he noted, have led to greater stability in the naira, with the gap between the official and Bureau de Change (BDC) rates narrowing to below two percent.

Improved liquidity in the FX market, according to the CBN, has eased imported inflation pressures and bolstered overall price stability.

The Bank’s foreign reserves remain robust, standing above $43 billion, enough to cover over eleven months of imports, supported by steady foreign exchange inflows.

Cardoso, speaking at the ongoing Annual Meetings of the International Monetary Fund (IMF) and World Bank Group in Washington D.C., expressed optimism about the inflation outlook.

“We expect inflation to continue its downward trend in the near term, driven by tight monetary conditions, a stable naira, and improved food supply,” he said.

The NBS data also showed a moderation in both core and food inflation.

Core inflation declined to 19.53 percent, while food inflation eased to 16.87 percent, reflecting improvements in domestic supply and the effects of sustained policy interventions.

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