Abuja: Nigeria’s inflation rate has shown a consistent downward trend, falling to 18.02% in September, marking its lowest level in three years. This development was announced by the Central Bank of Nigeria (CBN) Governor, Yemi Cardoso, during a statement made in Washington.
According to News Agency of Nigeria, Cardoso highlighted that the decline in inflation rate has been consistent for six consecutive months. Data provided by the National Bureau of Statistics (NBS) indicated that core inflation decreased to 19.53%, while food inflation moderated to 16.87% during the same period. The CBN Governor attributed this change to the apex bank’s stringent monetary policy actions aimed at restoring price stability and stabilizing public expectations.
In addressing previous inflation pressures, the CBN implemented a series of monetary tightening measures, raising the Monetary Policy Rate (MPR) from 18.75% to 27.50%, alongside increasing the Cash Reserve Ratio (CRR) to 50% for commercial banks and 16% for merchant banks. However, during its September meeting, the CBN adjusted its strategy slightly, reducing the MPR by 50 basis points to 27.00% and the CRR for commercial banks to 45%, all the while maintaining a firm stance against inflation.
The CBN also introduced reforms in the foreign exchange market, focusing on exchange rate unification and enhancing transparency to improve price discovery. Cardoso mentioned that these actions have led to the stabilization of the Naira, with the difference between the official and Bureau de Change (BDC) rates narrowing to below two percent. Improved liquidity in the foreign exchange market has contributed to curbing imported inflation and supporting price stability.
Cardoso further noted that foreign reserves remain robust, exceeding 43 billion dollars, which provides over eleven months of forward import cover. This stability is bolstered by sustained forex inflows. He emphasized the CBN’s commitment to continuing the disinflation trend, supported by a stable exchange rate and improvements in food supply. Additionally, moderation in petroleum product prices is expected to aid in further strengthening the disinflation efforts.
The News Agency of Nigeria reported that Cardoso had earlier expressed confidence that inflation would continue its downward trajectory. This assurance was provided at the ongoing annual meetings of the International Monetary Fund and the World Bank Group in Washington. Cardoso stated that the downward trend is expected to persist in the near term, facilitated by tight monetary conditions, a stable Naira, and increased food supply.