CBN Governor Highlights Policy Success at Monetary Policy Forum
Diaspora remittances through International Money Transfer Operators (IMTOs) surged to $4.18 billion in the first three quarters of 2024 (9M’24), marking a 79.4% increase from $2.33 billion recorded during the same period in 2023.
The Governor of the Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso, made this revelation during the Monetary Policy Stakeholders Forum in Abuja, attributing the growth to significant financial reforms implemented over the past year.
CBN’s Reforms Fueling Growth
Cardoso emphasized that various policies introduced by the apex bank contributed to strengthening Nigeria’s financial system and ensuring macroeconomic stability.
“This reform yielded tangible results, with remittances through IMTOs rising 79.4% in the first three quarters of 2024 to $4.18 billion, compared to $2.33 billion in the same period of 2023.”
Inflation Control Measures
The CBN Governor also acknowledged that 2024 posed significant economic challenges, including persistent inflationary pressures driven by both global and domestic factors.
He pointed out that unorthodox monetary policies, particularly those introduced since the COVID-19 pandemic, led to excessive liquidity without corresponding productivity growth. This situation exacerbated inflation and foreign exchange volatility.
To counteract these issues, the CBN’s Monetary Policy Committee (MPC) implemented decisive tightening measures, including:
- Raising the Monetary Policy Rate (MPR) by 875 basis points to 27.50%.
- Increasing the Cash Reserve Ratio (CRR) of Other Depository Corporations (ODCs) by 1750 basis points to 50%.
- Adjusting the asymmetric corridor around the MPR to regulate liquidity.
Preventing Inflation from Surging to 42.81%
According to Cardoso, counterfactual estimates suggest that without these policy interventions, Nigeria’s inflation rate could have reached a staggering 42.81% by December 2024.
“Excess naira liquidity in the system has amplified demand-driven inflation, further exacerbated by supply-side constraints stemming from structural deficits.”
He reiterated that the CBN remains committed to price stability while minimizing any negative impact on economic growth and livelihoods.
A Commitment to Long-Term Stability
Cardoso stressed that inflation undermines purchasing power, discourages investment, and widens economic inequality. Therefore, managing the disinflation process requires a balanced approach that ensures long-term economic stability without causing short-term disruptions.
“CBN is fully committed to ensuring price stability while minimizing adverse effects on growth and livelihoods.”
Conclusion
The substantial increase in diaspora remittances highlights the effectiveness of Nigeria’s financial policies in boosting economic confidence. With continued efforts to stabilize inflation and strengthen macroeconomic fundamentals, Nigeria aims to sustain this positive trajectory in the coming years.
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