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, saying such measures previously distorted the institution’s balance sheet and weakened policy effectiveness.
Cardoso made the remarks during the opening session of a Monetary Policy Committee workshop held on May 21, 2026, according to a statement issued by the CBN on Sunday.
The statement said the governor reaffirmed the bank’s commitment to orthodox monetary policy, transparency and evidence-based decision-making, describing the ongoing reforms as critical to restoring confidence in the Nigerian economy and strengthening macroeconomic stability.
The workshop, themed “Strengthening Monetary Policy Effectiveness Towards Sustainable Macroeconomic Stability,” brought together MPC members, deputy governors, directors and other stakeholders to discuss ways of improving monetary policy effectiveness amid evolving domestic and global economic conditions.
According to the statement, Cardoso reflected on Nigeria’s recent monetary policy history and highlighted the challenges facing the bank when the current administration assumed office. These, he said, included weakened institutional autonomy, reduced policy credibility and reliance on unorthodox monetary tools.
The statement read, “According to him, these challenges blurred the distinction between fiscal and monetary responsibilities, reduced transparency, and limited the effectiveness of policy interventions. He also observed that the foreign exchange market was opaque and inefficient, while weak fiscal-monetary coordination further constrained economic outcomes.”
The CBN noted that these structural weaknesses contributed to rising inflationary pressures, exchange-rate volatility and an erosion of investor and public confidence.
However, the statement said reforms introduced by the current leadership had begun reversing those trends.
It explained that the apex bank had restored a more orthodox approach to monetary policy under the current MPC framework, with renewed emphasis on conventional instruments and the Monetary Policy Rate as the primary signalling tool.
The statement added that improvements in liquidity management, forward guidance and policy communication had enhanced transparency and helped anchor expectations among households, businesses and investors.
“As a result, the Governor noted that inflation, while still elevated and requiring close monitoring, has begun to moderate, and exchange-rate stability has improved. Enhanced transparency in the foreign exchange market has also supported more efficient price discovery and reduced volatility, contributing to a gradual restoration of confidence,” the statement read.
The apex bank further stated that the economy’s growing resilience to external shocks, including recent geopolitical developments in the Middle East, reflected the impact of ongoing reforms and improved policy coordination.
Beyond monetary policy outcomes, the statement highlighted progress in strengthening the institution’s internal processes.
It noted that decision-making within the bank was increasingly anchored on data-driven analysis and structured deliberation, while communication practices had become more consistent and predictable.