James Emejo writes on the Central Bank of Nigeria’s adherence to rule-based monetary policy
The Governor of the Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso, has repeatedly demonstrated his faith in the implementation of orthodox monetary policy, which he believes remains crucial for restoring investor confidence in the economy.
Since taking over the helm of affairs at the apex bank in September 2023, he has made orthodox economic principles one of the cardinal principles of his administration – and now he has the numbers to prove his policy choices.
Orthodox intervention is traditional central banking strategies that rely on established, market-based mechanisms—primarily interest rates and open-market operations—to control inflation and stabilise the economy.
Similarly, the rules-based monetary framework enables the central bank to tweak interest rates and money supply based on predetermined formulas and mathematical models rather than ad-hoc, subjective human judgment, and is mainly designed to provide economic stability, transparency, and predictability.
