.…16 banks cross recapitalisation hurdle
The Central Bank of Nigeria kept its Monetary Policy Rate (MPR) unchanged at 27% having seen a clear evidence that earlier tightening was working and that stability must be preserved to support the next phase of economic recovery, governor Olayemi Cardoso said on Tuesday.
Briefing journalists on the outcomes of the two days Monetary Policy Committee (MPC) in Abuja, Cardoso said the decision “was underpinned by the need to sustain the progress made so far towards achieving low and stable inflation,” after headline inflation slowed for the seventh straight month to 16.05% in October from 18.02% in September.
He said, “Inflation has gone down steadily. This time last year we were talking of 34 plus and now we are down to 16.”
Alongside holding the MPR, the MPC adjusted the policy corridor to +50/–450 basis points while retaining the cash-reserve ratio for deposit-money banks at 45%, merchant banks at 16%, and that for non-TSA public sector deposits at 75%. The committee also left liquidity ratio at 30%.
The Governor stressed that the easing inflation trend reflected the combined impact of tight monetary conditions, a more stable exchange rate, higher capital inflows and stronger food supply.
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Food inflation moderated sharply to 13.12% in October, while core inflation slowed to 18.69%. With GDP expanding 4.23% in the second quarter of the year and the purchasing managers’ index rising to a five-year high of 56.4 points in November, Cardoso said the data pointed to “a more positive growth outlook” into the final quarter of the year.
A major highlight of the Committee’s assessment was the health of the banking sector, where Cardoso confirmed that the recapitalisation programme was progressing faster than expected, with sixteen banks already meeting the requirements ahead of the 2026 dealine.
“Sixteen banks have achieved full compliance with the revised capital requirements,” he said, adding that financial soundness indicators remained strong and within regulatory thresholds.
“Twenty-seven of them have through various means raised capital. We are monitoring the developments, and from every indication, it is going in the right trajectory,” he said.
He added that the CBN was “in the stage of building a financial industry that will be very, very, very fit for purpose” — one capable of supporting the strengthening of buffers and positioning banks for the future.
He noted that many Nigerian banks operate across Africa and “have been innovative in various spheres,” and that the additional capital would help them better navigate risks in multiple jurisdictions. “And in return, that helps the Nigerians as well, the Nigerian traders, Nigerians who go across all these various geographies,” he said. “It should be a thing of great joy and satisfaction to know that you have your own banks out there that understand your peculiar needs and are able to respond accordingly.”
He also emphasised improvements in Nigeria’s external buffers, noting that foreign-exchange reserves had risen 9.19% to $46.7 billion by mid-November—equivalent to 10.3 months of import cover. “Right now, we are about 10 months import cover. And that is a good thing,” he said. But he added that the real picture was even stronger because “there is significant liquidity within the market that unless you are a regular follower of these events, you may not see.”
Cardoso attributed the stronger reserve position to reforms that have made the naira more competitive, boosting non-oil exports, as well as a pickup in oil production, higher remittances and renewed portfolio inflows.
“We are building the reserves on a very systemic basis,” he said, citing rising confidence among foreign investors.
Addressing questions on the foreign-exchange market, the governor
pushed back against claims that the current narrow spread—about 2%—between the official and parallel markets may be artificially engineered.
According to him, “What we have in the foreign exchange markets in Nigeria today, to the best of my knowledge, is something that hasn’t happened before.”
He said the new willingness-to-buy, willingness-to-sell framework under the Electronic Foreign Exchange Matching System (EFEMS) was driving transparency and genuine price discovery.
“You have a market where there are willing buyers, willing sellers… and our EFEMS system is one that is open and very transparent,” he said.
Daily turnover now averages about $500 million, he added, often without any CBN intervention — a sharp departure from the recent past when, as he put it, “if the CBN does not intervene, nothing happens.”
Cardoso argued that policy consistency and the elimination of arbitrage opportunities had strengthened confidence. “Everybody has equal access to a market that has become very, very open and very transparent, and where there’s a willing buyer and a willing seller, and you’re free to come in and leave as you like.”
He said those changes were translating into real benefits for travellers who can now make payments abroad with their Naira card.
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According to him, “the fear that used to permeate that industry and market has literally disappeared. Nigerians now are very happy and very proud to own the Naira.”
Responding to concerns that Nigerians were yet to feel relief despite falling inflation, Cardoso insisted that the benefits of stability unfold gradually.
“Stability is a very fundamental process in the road to growth,” he said. “After stability comes investment and after investment comes growth… I’m almost certain that in a few years’ time, you will begin to see exactly what I’m talking about.”
He reaffirmed the CBN’s commitment to an evidence-based approach and said the Bank expects disinflation to continue, supported by the harvest season and a stable FX market.
“What we don’t need,” he warned, “is anything that is short-term and cannot be sustained.”
