CBN reaffirms commitment to inflation targeting, eyes 6–9%

By Emma Ujah, Abuja

ABUJA — The Central Bank of Nigeria (CBN) has reiterated its commitment to advancing an inflation-targeting monetary policy framework, emphasizing the goal of steering headline inflation into a 6–9 percent range.

The Bank’s Deputy Governor in charge of Economic Policy, Dr. Muhammad Abdullahi, disclosed this during a strategic session with the Nigerian Economic Society (NES) and the academic community in Abuja. He described the move toward inflation targeting as “a significant shift toward a transparent, forward-looking, and rules-based monetary policy system anchored in long-term price stability.”

Dr. Abdullahi explained that the framework would guide market expectations, reduce the impact of supply-side shocks, and improve transparency, accountability, and credibility of monetary policy. “Stabilizing inflation expectations helps lower risk premia, supports long-term investment plans, and enables policymakers to focus beyond short-term disruptions,” he said.

Highlighting the reforms supporting this transition, he noted the CBN’s return to orthodox monetary policy tools, withdrawal from quasi-fiscal activities, strengthened institutional independence, and major foreign exchange market reforms such as rate unification and electronic trading platforms. These measures, he said, have reduced volatility and enhanced price discovery.

The DG also cited improvements in bank recapitalization, prudential oversight, and coordination with fiscal authorities as critical to stabilizing the financial sector and ensuring coherent monetary operations. He pointed out that these reforms have contributed to a sharp decline in headline inflation, from 34.8 percent in late 2024 to 15.1 percent by early 2026.

Looking forward, Dr. Abdullahi stressed that sustained policy discipline, anchored expectations, and a credible institutional framework are essential to achieving the medium-term inflation target of 6–9 percent, barring major external shocks.

Earlier, Dr. Victor Oboh, Director of the Monetary Policy Department at CBN, reaffirmed the Bank’s commitment to collaboration with NES to enhance policy effectiveness and macroeconomic stability.

Dr. Baba Yusuf Musa, NES President and Chairman, commended the CBN for its openness and reform-minded approach, pledging the Society’s support in advancing evidence-based monetary policy. “Nigeria needs a credible Central Bank, and the Nigerian Economic Society needs a Central Bank worth standing with,” he said.

The session underscored the CBN’s focus on deepening engagement with academics and researchers to ensure robust, transparent, and forward-looking monetary policy decisions.

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