He stated that while the recently rebased Consumer Price Index (CPI) indicates a year-on-year headline inflation rate of 24.48 percent, which reflects the country’s economic realities, this figure remains significantly above acceptable levels.
CBN to publicise rebased CPI data findings after review
He stated that the apex bank, as a data-driven institution, is currently reviewing the rebased figures released by the National Bureau of Statistics (NBS) and will publish its findings in due course.
He spoke while briefing on the decisions of the Monetary Policy Committee (MPC) which held for the first time in the year, on Wednesday and Thursday in Abuja.
Cardoso said the committee was unanimous in its decision to hold all parameters including retaining the Monetary Policy Rate (MPR) at 27.50 percent and the asymmetric corridor around the MPR at +500/-100 basis points.
The committee also retained the Cash Reserve Ratio (CRR) of Deposit Money Banks at 50 percent and Merchant Banks at 16 per cent. It equally left the Liquidity Ratio unchnaged at 30 percent.
He noted that the decision to maintain interest rates is supported by recent macroeconomic developments, which are anticipated to positively influence price dynamics in the near to medium term.
These include the stability in the foreign exchange market with the resultant appreciation of the exchange rate and the gradual moderation in the price of fuel prices.
However, the CBN remains concerned about the risk of persisting inflationary pressures driven largely by food prices.
“We will certainly stay that course. We will be vigilant. We will not take anything for granted. We believe that inflation has been too high for too long.
“Our objective, in the medium to long term, is to ensure that we are able to bring this down from the double digits to the single digit,” Cardoso stated.
“As we continue with the policies that we have embarked upon, we believe that the road of travel will be in that direction,” he added.
The governor emphasized that achieving the single-digit inflation target will require stronger coordination between monetary and fiscal authorities, especially as improvements in various markets continue to progress.
He said: “I will be deceiving you to say the fiscal will do it on its own, the monetary will do it on its own. It won’t be. The coordination has always been important. But at no time can it be as important, in my view, as the situation we have now, because we can see change in a positive direction, and we need to not only maintain and hold but also improve it.”
He also noted that the recent Monetary Policy Forum, which successfully brought together fiscal and monetary authorities, marks the beginning of such coordination and highlights the potential benefits of collaborative efforts.
Cardoso noted that CBN reforms such as the Electronic Foreign Exchange Matching System (EFEMS) and the new FX code have boosted investor confidence, stabilised the naira, and increased reserves to $39.4 billion by February 14, 2025.
The reserves, will cover over nine months imports.
The other reforms included unifying the exchange rate, curbing round-tripping, and removing spreads on foreign interbank transactions, stabilising the FX market and ensuring positive net FX flows.
Additionally, he noted that the balance of payment has remained strong with a positive current account balance of US$6.06 billion as at the end of the third quarter of 2024, the governor added.
