Cardoso Rejects Calls for CBN to Return to Intervention Prog

The Governor of the Central Bank of Nigeria, Olayemi Cardoso, has defended the apex bank’s return to orthodox monetary policy and warned against renewed calls for interventionist programmes, saying such measures previously distorted the institution’s balance sheet and weakened policy effectiveness.

Cardoso made the remarks during the opening session of a Monetary Policy Committee workshop held on May 21, 2026, according to a statement issued by the CBN on Sunday.

The statement said the governor reaffirmed the bank’s commitment to orthodox monetary policy, transparency and evidence-based decision-making, describing the ongoing reforms as critical to restoring confidence in the Nigerian economy and strengthening macroeconomic stability.

The workshop, themed “Strengthening Monetary Policy Effectiveness Towards Sustainable Macroeconomic Stability,” brought together MPC members, deputy governors, directors and other stakeholders to discuss ways of improving monetary policy effectiveness amid evolving domestic and global economic conditions.

According to the statement, Cardoso reflected on Nigeria’s recent monetary policy history and highlighted the challenges facing the bank when the current administration assumed office. These, he said, included weakened institutional autonomy, reduced policy credibility and reliance on unorthodox monetary tools.

The statement read, “According to him, these challenges blurred the distinction between fiscal and monetary responsibilities, reduced transparency, and limited the effectiveness of policy interventions. He also observed that the foreign exchange market was opaque and inefficient, while weak fiscal-monetary coordination further constrained economic outcomes.”

The CBN noted that these structural weaknesses contributed to rising inflationary pressures, exchange-rate volatility and an erosion of investor and public confidence.

However, the statement said reforms introduced by the current leadership had begun reversing those trends.

It explained that the apex bank had restored a more orthodox approach to monetary policy under the current MPC framework, with renewed emphasis on conventional instruments and the Monetary Policy Rate as the primary signalling tool.

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

“As a result, the Governor noted that inflation, while still elevated and requiring close monitoring, has begun to moderate, and exchange-rate stability has improved. Enhanced transparency in the foreign exchange market has also supported more efficient price discovery and reduced volatility, contributing to a gradual restoration of confidence,” the statement read.

The apex bank further stated that the economy’s growing resilience to external shocks, including recent geopolitical developments in the Middle East, reflected the impact of ongoing reforms and improved policy coordination.

Beyond monetary policy outcomes, the statement highlighted progress in strengthening the institution’s internal processes.

It noted that decision-making within the bank was increasingly anchored on data-driven analysis and structured deliberation, while communication practices had become more consistent and predictable.

According to the statement, those efforts align with the CBN’s medium-term objective of transitioning to a more explicit inflation-targeting framework, a process that will require deeper institutional reforms, stronger collaboration and sustained technical work.

The statement also quoted Cardoso as describing the recently concluded banking recapitalisation exercise as evidence of effective policy coordination, extensive stakeholder engagement and the diligence of the bank’s financial-sector supervision teams.

Reiterating the bank’s commitment to orthodox monetary management, Cardoso cautioned against a return to interventionist measures.

“The Governor reiterated the Bank’s focus on orthodox monetary policy and cautioned against renewed calls for interventionist measures, noting that such programmes had previously distorted the Bank’s balance sheet. He stressed that the institution’s renewed credibility over the past two and a half years has largely stemmed from its disciplined reliance on conventional policy tools,” the statement read.

The governor also reaffirmed the bank’s commitment to transparency, evidence-based policymaking and institutional strengthening, stressing the importance of continuous learning and adaptation in achieving sustainable macroeconomic stability.

According to the statement, he expressed confidence that the workshop would generate practical insights to strengthen the implementation of monetary policy and support sustainable economic growth.

Earlier in his welcome address, the Deputy Governor for Economic Policy, Dr Muhammad Abdullahi, emphasised the importance of broad-based participation in monetary policy discussions.

The statement quoted Abdullahi as saying that facilitators at the workshop were drawn from policy, research and professional practice, adding that the diversity of perspectives was essential for informed dialogue, rigorous analysis and collaborative engagement.

He explained that the workshop was designed to provide a platform for structured dialogue, technical exchange and shared learning.

According to the statement, Abdullahi noted that the workshop theme was particularly relevant in the current environment, where monetary policy is influenced by evolving domestic economic conditions, global spillovers and heightened uncertainty.

He added that the theme reflected the bank’s commitment to continuous improvement in policy formulation and implementation and expressed optimism that the outcomes of the workshop would support ongoing efforts to strengthen policy analysis and execution within the CBN.

The two-day event featured technical sessions led by experts with practical experience in monetary policy and financial markets. Discussions focused on policy transmission mechanisms, financial market development, analytical frameworks and institutional processes tailored to Nigeria’s economic environment, the statement added.