The Governor of the Central Bank of Nigeria, Olayemi Cardoso, has defended the apex bank’s return to orthodox monetary policy and warned against renewed calls for interventionist programmes.
Cardoso said previous interventionist measures distorted the balance sheet of the Central Bank of Nigeria and weakened the effectiveness of monetary policy.
He made the remarks during the opening session of the Monetary Policy Committee workshop held on May 21, 2026.
According to a statement issued by the CBN on Sunday, the governor reaffirmed the bank’s commitment to orthodox monetary policy, transparency and evidence-based decision-making.
He described the ongoing reforms as critical to restoring confidence in Nigeria’s economy and strengthening macroeconomic stability.
The workshop, themed “Strengthening Monetary Policy Effectiveness Towards Sustainable Macroeconomic Stability,” brought together MPC members, deputy governors, directors and financial sector stakeholders.
Participants discussed ways to improve monetary policy effectiveness amid changing domestic and global economic conditions.
Cardoso reflected on Nigeria’s recent monetary policy history and outlined the challenges inherited by the current administration.
According to the statement, these included weakened institutional autonomy, reduced policy credibility and excessive dependence on unorthodox monetary tools.
The CBN said the challenges blurred the line between fiscal and monetary responsibilities, reduced transparency and limited the effectiveness of policy interventions.
The governor also observed that the foreign exchange market was previously opaque and inefficient, while weak coordination between fiscal and monetary authorities worsened economic outcomes.
According to the apex bank, these structural weaknesses contributed to rising inflation, exchange-rate volatility and declining investor confidence.
However, the statement noted that reforms introduced by the current leadership have started reversing those trends.
The CBN explained that it has restored a more orthodox approach to monetary policy under the current Monetary Policy Committee framework.
The bank said there is now renewed emphasis on conventional policy instruments and the Monetary Policy Rate as the main signalling tool.
According to the statement, improvements in liquidity management, forward guidance and policy communication have strengthened transparency and helped stabilise expectations among households, businesses and investors.
The apex bank added that inflation, although still elevated, has started moderating while exchange-rate stability has improved.
It also stated that greater transparency in the foreign exchange market has improved price discovery and reduced volatility.
The CBN further said Nigeria’s economy has become more resilient to external shocks, including recent geopolitical tensions in the Middle East.
The statement linked the improved resilience to ongoing reforms and better policy coordination.
Beyond monetary policy outcomes, the bank highlighted improvements in its internal decision-making processes.
According to the statement, policy decisions are now increasingly driven by data analysis and structured deliberations.
The apex bank also said communication practices have become more consistent and predictable.
The CBN noted that these reforms align with its medium-term goal of transitioning to a more explicit inflation-targeting framework.
The process, according to the bank, will require deeper institutional reforms, stronger collaboration and sustained technical work.
Cardoso also described the recently concluded banking recapitalisation exercise as evidence of effective policy coordination and stakeholder engagement.
He praised the work of the bank’s financial-sector supervision teams during the exercise.
Reaffirming the CBN’s commitment to orthodox monetary management, the governor cautioned against calls for a return to interventionist policies.
According to the statement, Cardoso stressed that the apex bank’s renewed credibility over the last two and a half years has largely resulted from disciplined reliance on conventional policy tools.
He also reaffirmed the bank’s commitment to transparency, institutional strengthening and evidence-based policymaking.
Cardoso stressed the importance of continuous learning and adaptation in achieving sustainable macroeconomic stability.
Earlier in his welcome address, the Deputy Governor for Economic Policy, Muhammad Abdullahi, highlighted the importance of broad participation in monetary policy discussions.
He said facilitators at the workshop were drawn from policy, research and professional practice backgrounds.
According to him, the diversity of perspectives would support informed dialogue, rigorous analysis and collaborative engagement.
Abdullahi explained that the workshop was designed to encourage technical exchange, structured discussions and shared learning.
He added that the workshop theme was particularly relevant at a time when monetary policy is being shaped by domestic economic conditions, global spillovers and heightened uncertainty.
The two-day event featured technical sessions led by experts in monetary policy and financial markets.
Discussions focused on policy transmission mechanisms, financial market development, analytical frameworks and institutional processes suited to Nigeria’s economic environment.
