The Governor of the Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso, has disclosed that Nigeria’s inflation rate has dropped to its lowest level in three years, expressing confidence that the downward trend will continue in the coming months.
Cardoso, who stated this at the ongoing Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group, said the CBN expects inflation “to continue to trend downward in the near term, supported by tight monetary conditions, a stable naira, and increased food supply.”
He further assured that the CBN “remains committed to strengthening the disinflation trend,” through a mix of policy measures that include exchange rate stability, sustained improvements in food supply, and moderation in petroleum product prices.
Nigeria’s headline inflation fell for the sixth consecutive month in September 2025, dropping to 18.02 per cent, according to the latest figures from the National Bureau of Statistics (NBS).
The report also showed that core inflation slowed to 19.53 percent while food inflation moderated to 16.87 percent within the same period.
This represents a major turnaround from the inflationary peak of 34.19 percent recorded in June 2024 — a period marked by sharp currency depreciation, fuel price adjustments, and elevated global commodity costs.
The improvement reflects the impact of the CBN’s decisive monetary policy measures aimed at restoring price stability and anchoring expectations.
To contain inflationary pressures, the CBN had raised the Monetary Policy Rate (MPR) from 18.75 percent to 27.50 percent through an aggressive tightening cycle. The Cash Reserve Ratio (CRR) was also raised to 50 percent for commercial banks and 16 percent for merchant banks to mop up excess liquidity from the banking system.
At its September 2025 Monetary Policy Committee (MPC) meeting, the Bank slightly eased its stance, cutting the MPR by 50 basis points to 27.00 percent and reducing the CRR for commercial banks to 45 percent, while maintaining what it described as a “firm anti-inflationary posture.”
The CBN’s tightening measures have been complemented by reforms in the foreign exchange (FX) market, particularly the exchange rate unification and improved transparency mechanisms aimed at better price discovery.
As a result, the Naira has stabilised with the spread between the official and Bureau de Change (BDC) rates narrowing to below 2 percent.
This stability, coupled with improved liquidity in the FX market, has reduced the pass-through of imported inflation and reinforced the broader disinflation process.
Nigeria’s foreign reserves have also remained strong, standing above $43 billion, enough to cover more than eleven months of imports, supported by consistent inflows from remittances, portfolio investment, and oil export earnings.
Analysts believe that the sustained decline in inflation reflects growing policy credibility and a gradual restoration of confidence in the economy. The next few months, they say, will be critical in determining how effectively the CBN balances its twin objectives of price stability and economic growth.
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