Olayemi Cardoso, governor of the Central Bank of Nigeria (CBN) and four other members of Nigeria’s Monetary Policy Committee (MPC) voted to keep interest rates unchanged at the Committee’s November meeting, underscoring deep divisions among policymakers over the next direction of monetary policy.
Minutes of the MPC meeting held on November 25 revealed a split vote, with five members supporting a hold at 27 percent and five members favouring a rate cut. As chairman of the Committee, Cardoso cast the deciding vote, tipping the balance in favour of leaving rates unchanged.
Explaining his position, Cardoso said holding rates was a deliberate signal to reinforce macroeconomic stability and acknowledge that the current monetary policy stance was beginning to deliver the intended outcomes.
“In my view, holding is a clear signal of reinforcing stability and acknowledgement that the current policy stance is having the desired effect,” Cardoso said.
He noted that the improved anchoring of overnight market rates within the standing facilities corridor demonstrated stronger transmission of monetary policy to the wholesale market, describing this development as a positive outcome.
According to him, the effective transmission of policy provided room for further technical adjustments to the corridor in response to evolving liquidity conditions and sustained price action in the benchmark government securities market.
Cardoso added that the proposed asymmetric adjustment of the monetary policy corridor widening the floor while keeping the ceiling tight was designed to absorb persistent excess liquidity without undermining the Central Bank’s control over short-term interest rates.
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