Nigeria’s bold monetary policy reforms are beginning to yield measurable results, with easing inflation, a more stable currency, and renewed investor interest signaling progress in Africa’s largest economy.
The year 2025 has proven to be a turning point in Nigeria’s monetary policy evolution. Marked by decisive reforms and difficult policy choices, the period reflects a renewed commitment to restoring price stability, strengthening the financial system, and laying the groundwork for sustainable economic growth.
At the core of these reforms is a disciplined, data-driven approach adopted by monetary authorities. Throughout the year, the Monetary Policy Committee (MPC) maintained a firm tightening stance, raising interest rates to curb inflationary pressures driven by rising food costs, exchange-rate pass-through effects, and persistent global supply chain disruptions.
These tough measures are gradually producing positive outcomes. Headline inflation has begun to moderate, offering cautious optimism, although food inflation continues to place pressure on household budgets across the country.
Significant attention has also been directed at stabilising the foreign exchange market. To rebuild confidence and enhance market efficiency, the Central Bank introduced comprehensive reforms, most notably the Nigeria Foreign Exchange Code.
The FX Code aims to promote ethical conduct, enhance transparency, and strengthen discipline among market participants. Improved foreign exchange reporting standards and greater clarity around remittance inflows have helped boost liquidity, reduce speculative activities, and support a more transparent, market-driven exchange-rate framework.
Together, these reforms signal a determined effort to reposition Nigeria’s economy, improve investor confidence, and create a more resilient monetary environment capable of withstanding both domestic and global shocks.