Nigeria’s central bank pledged major changes to get a grip on inflation and steady the country’s battered currency, signaling tighter monetary policy ahead.
The Central Bank of Nigeria will switch to inflation targeting instead of trying to control money supply in its battle to slow price increases, Governor Olayemi Cardoso said in a speech to bankers. The central bank raised its key rate by 25 basis points to 18.75% when it last met in July. Inflation since then has accelerated to an 18-year high of 27.3%. Cardoso also ordered commercial banks to bolster capital reserves.
“The Central Bank of Nigeria is committed to achieving monetary and price stability,” Cardoso said. “We will tackle institutional deficiencies, restore corporate governance, strengthen regulations and implement prudent policies.”