…As economic reforms saved Naira from massive depreciation
….Says banking sector resilient, safe
By Cyril Ogar
Central Bank of Nigeria ,CBN, has retained its benchmark lending rate at 27.5%, citing ease of inflation and foreign exchange improvements.
The decision was reached at the 300th Monetary Policy Committee Meeting held on Tuesday.
The apex bank governor, Olayemi Cardoso, said the committee was unanimous in its decision to retain the Monetary Policy Rate.
The CBN had, at the last MPC meeting retained the benchmark interest rate at 27.50%.
At the 300th meeting, the MPC also retained the asymmetric corridor around the MPR at +500/-100 basis points.
The apex bank also retained the Cash Reserve Ratio of Deposit Money Banks at 50% and Merchant Banks at 16% and retained the Liquidity Ratio at 30%.
He said the decision was influenced by a positive balance of payments position and the relative stability observed in the foreign exchange market.
Cardoso said, “The MPC noted the relative improvements in some key indicators which are expected to support the overall moderation in prices in the near to medium term. These include the progressive narrowing of the gap between the Nigeria foreign exchange market, NAFEM, and the windows
“The committee, however, acknowledged underlying inflationary pressures driven largely by high electricity prices, persistent foreign exchange demand pressure, and other legacy structural factors”.
Cardoso said the committee also called on the fiscal authority to strengthen current efforts at enhancing foreign exchange earnings, especially from gas, oil, and non-oil exports.
However, he noted the impact of falling crude oil prices on the Nigerian economy.
“The MPC, however, expressed concerns about a recent decline in crude oil prices attributable to increased production by non-OPEC members, as well as uncertainties associated with US trade policy, which present new challenges for fiscal receipts and budget implementation”, he decried.
He said the MPC are confident on the stability of the banking sector, adding that banks are cooperating with the recapitalization exercise.
The apex bank boss said the committee reaffirmed the continued stability of the banking system, “following notable improvements in key performance indicators and observed the appreciable progress in the ongoing recapitalization exercise.
“Members thus called on the bank to sustain its effective oversight of the industry to ensure compliance with regulatory and macro-prudential guidelines”.
In the same vein, the Central Bank of Nigeria said, the Naira would have been in a worse position against the United States Dollar without the bold reforms it initiated in 2023.
The apex bank governor, Olayemi Cardoso said this at the 300th Monetary Policy Committee Meeting held yesterday.
The Naira depreciated from around N500 per dollar to about N1600 per dollar in 2025 after the apex bank introduced market reforms, which include a managed float and reintroducing the ‘willing buyer, willing seller model’.
The reforms were aimed at attracting investors back to the country after rating agencies claimed that the naira was overpriced at around N500 per dollar in early 2023.
During the period, the spread between the official rate and the parallel market rate was over N300, giving room for round-tripping.
“I dare say that if those actions had not been taken when they were, the results would have been a lot more disastrous. It would have been not even more, they would have been disastrous for us”, he said on the currency depreciation.
Cardoso said at the MPC that the journey that the reforms will begin to yield greater results as time goes on.
He explained, “On the issue of depreciation of the currency, which obviously everybody is always very interested in, you find out that the various currencies of the world were under attack and were having to defend themselves. You find that relative to other countries, Nigeria came out very well indeed.
“We were able to ensure that our depreciation was very, very modest and that the stability was pretty much there. And that, in my view, was a reflection of a lot of the measures that we had taken prior to this time to stabilize our economy”.
He said it was the right decision for the apex bank to have started the reforms early adding that “We stayed the course to the point where we built buffers which are able to withstand shocks that come in”.
Earlier on Monday the apex Bank had reassured the general public, depositors, and stakeholders that the country’s banking sector remains resilient, safe, and sound despite reported challenges.
The Bank said in a statement by the Acting Director, Corporate Communications Department of the Bank, Hakama Sidi Ali, that it was aware of certain publications in certain newspapers and social media about
certain misleading information regarding the operations of a regulated financial institution in the country.
Although Sidi-Ali did not disclose the name of the bank referenced in the publications, she expressed the CBN’s confidence that the country’s banking sector was stable, safe and sound.
“The CBN wishes to categorically reassure the public, depositors, and stakeholders that the Nigerian banking sector remains resilient, safe, and sound.
“Like all other regulated institutions, the institution referenced in these reports is held to stringent regulatory requirements, and there is no cause for concern regarding the safety of depositors’ funds”, she stated.
The bank affirmed that it would continue to monitor all financial institutions under its regulatory purview to establish and maintain robust frameworks for early warning signals and risk-based supervision.
These mechanisms, he pointed out, would ensure that any emerging issues were promptly addressed to protect the integrity of the financial system.
While urging the public to disregard sensational or unverified claims and rely solely on official channels for information about the financial system.
“The CBN remains dedicated to fostering a secure banking environment where depositors can be fully confident in the safety of their funds.
“It will continue to monitor and adapt strategies to safeguard the financial interests of all Nigerians and stakeholders in our financial system”, she added.
