Nigeria’s monetary policy landscape has undergone sweeping transformation over the past two decades — and at the heart of these reforms sits the Central Bank of Nigeria’s Monetary Policy Department (MPD). According to Governor Olayemi Cardoso, the MPD has been instrumental to the apex bank’s most defining achievements, shaping policy direction, stabilising macroeconomic indicators, and reinforcing investor confidence.

Speaking at the MPD’s 20th Anniversary Colloquium in Abuja, themed “Monetary Policy in Nigeria: Past, Present and Future,” Cardoso — represented by Deputy Governor, Economic Policy, Dr Mohammed Abdullai — detailed how the department has quietly but consistently served as the intellectual backbone of Nigeria’s monetary system.

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A Two-Decade Evolution: From Policy Support Unit to Nigeria’s Monetary Nerve Centre

Cardoso highlighted that the MPD’s work extends far beyond research and advisory functions. Over the years, the department has:

✔ Provided Core Technical Support

MPD has powered the decision-making process of Nigeria’s most critical policy organs, including:

• The Monetary Policy Committee (MPC)
  
• The Monetary Policy Technical Committee (MPTC)
  
• The CBN Board, ensuring alignment and coherence in policy outcomes
  

✔ Introduced the Monetary Policy Rate (MPR)

One of the MPD’s biggest milestones is the 2006 introduction of the MPR, replacing the outdated minimum rediscount rate.
This single innovation brought:

• Greater clarity to policy signals
  
• Improved coordination between fiscal and monetary authorities
  
• Enhanced credibility in the market
  

✔ Designed the Interest Rate Corridor System

MPD also championed the adoption of the Interest Rate Corridor (IRC) — setting structured bounds around the MPR to help moderate short-term interest rates and improve liquidity management across financial markets.

✔ Strengthened Policy Communication

Nigeria’s move toward clearer, structured, data-driven communication was driven by MPD’s reforms — ensuring that monetary policy decisions are better understood by markets, analysts, and global investors.

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CBN’s Recent Gains: Disinflation, FX Stability, Restored Confidence

Cardoso emphasised that Nigeria’s economy is currently experiencing significant shifts attributable to bold reforms and strict monetary tightening.

📉 Inflation Falls From 34.6% to 16%

As of October 2025, the CBN recorded:

• Seven consecutive months of disinflation
  
• The lowest inflation rate in three years
  
• A cooling of core inflation, signalling effective policy transmission
  

💹 Naira Strengthens, FX Market Stabilises

The exchange rate has begun to stabilise following months of turbulence, underscoring renewed market confidence in CBN’s policy direction.

These gains, Cardoso noted, reflect private-sector trust in a more predictable monetary environment — something MPD has consistently worked to achieve.

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MPD at 20: A Legacy of Rigor and Resilience

Director of MPD, Dr Victor Oboh, described the department as a hub of intellectual rigor, analytical depth, and strategic clarity, noting that MPD has shaped Nigeria’s transition from direct controls to modern, rules-based monetary frameworks.

MPD’s Influence Through Crises

The department has steered Nigeria through major global shocks, including:

• The 2008 global financial crisis
  
• Oil price crashes
  
• The COVID-19 pandemic
  

Through these disruptions, MPD supplied data-driven guidance that prevented deeper macroeconomic instability.

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BRANDECONOMY Insight

The Monetary Policy Department’s 20-year journey underscores a central truth: institutions, not individuals, sustain economic stability.
As Nigeria navigates inflation, weak productivity, forex volatility and structural reforms, MPD remains one of the few consistently reliable anchors.

Its ability to evolve—embracing data analytics, policy transparency, and stronger communication—positions it as a decisive force in shaping Nigeria’s economic future. For investors, lenders, and international partners, MPD’s work signals that the CBN is recommitting to orthodoxy, discipline, and long-term credibility.

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