Cardosos Rejects Call For CBN’s Return To Interventionist Policies

…Says FX Policies Under Emefiele Opaque, Ineffective

The Governor of the Central Bank of Nigeria, Mr. Olayemi Cardoso, has reaffirmed the apex bank’s commitment to orthodox monetary policy, warning against a return to interventionist programmes that previously distorted the institution’s balance sheet and weakened policy credibility.

Cardoso stated this while declaring open the Monetary Policy Committee workshop themed, “Strengthening Monetary Policy Effectiveness Towards Sustainable Macroeconomic Stability.”

He said the reforms introduced by the current leadership of the CBN were already yielding positive outcomes, including improved exchange-rate stability, enhanced transparency in the foreign exchange market, and gradual moderation in inflationary pressures.

According to him, the bank’s renewed reliance on conventional monetary policy tools has helped restore investor confidence and strengthen macroeconomic stability.

Cardoso noted that when the current management assumed office, the apex bank faced significant structural and institutional challenges, including weakened policy credibility, reduced institutional autonomy, and heavy dependence on unorthodox monetary interventions.

He said these practices blurred the line between fiscal and monetary responsibilities, reduced transparency, and constrained the effectiveness of policy measures.

The CBN governor also described the foreign exchange market inherited by the current administration as opaque and inefficient, adding that weak coordination between fiscal and monetary authorities further worsened economic conditions.

“These structural weaknesses contributed to rising inflationary pressures, exchange-rate volatility, and erosion of investor and public confidence,” he said.

Cardoso, however, stressed that the apex bank had since restored a more orthodox monetary policy framework under the current Monetary Policy Committee arrangement, with stronger emphasis on conventional instruments and the monetary policy rate as the primary signalling tool.

He explained that improvements in liquidity management, forward guidance, and policy communication had enhanced transparency and helped anchor expectations among households, businesses, and investors.

According to him, although inflation remains elevated and requires close monitoring, current reforms have started producing positive results.

“Exchange-rate stability has improved, while enhanced transparency in the foreign exchange market has supported efficient price discovery and reduced volatility,” he stated.

The governor further attributed the economy’s growing resilience to external shocks, including recent geopolitical tensions in the Middle East, to ongoing reforms and improved policy coordination.

Cardoso said the apex bank was also strengthening its institutional framework by deepening data-driven decision-making and improving communication practices to make policy direction more predictable.

He added that the reforms align with the CBN’s medium-term objective of transitioning towards a more explicit inflation-targeting framework.

Speaking on the recently concluded banking recapitalisation exercise, Cardoso described it as evidence of effective policy coordination, stakeholder engagement, and strong financial-sector supervision.

Reiterating the bank’s position against interventionist policies, he warned that such programmes had previously undermined the apex bank’s balance sheet and weakened monetary policy transmission.

He maintained that the institution’s growing credibility over the past two and a half years was largely due to disciplined adherence to orthodox monetary policy tools.

Cardoso reaffirmed the bank’s commitment to transparency, evidence-based policymaking, and institutional strengthening, expressing confidence that the workshop would generate practical ideas to further improve monetary policy implementation and support sustainable economic growth.

Earlier in his remarks, the Deputy Governor in charge of Economic Policy Directorate, Dr. Muhammad Sani Abdullahi, said the workshop was designed to promote structured dialogue, technical exchange, and collaborative learning on monetary policy issues.

He noted that the workshop brought together experts from policy, research, and professional practice to strengthen policy formulation and implementation amid evolving domestic and global economic uncertainties.