Senate Lauds CBN's Mid-Year Economic Performance, Citing Stability Gains
In a significant show of confidence, the Nigerian Senate has given its strong endorsement to the Central Bank of Nigeria (CBN) for its performance and macroeconomic policies over the past six months. This commendation comes amid ongoing economic challenges and heightened political activity, highlighting a perceived shift towards stability in the nation's financial and monetary landscape.
The praise was delivered on Wednesday, July 2, 2025, through the Senate Committee on Banking, Insurance, and Other Financial Institutions, chaired by Senator Adetokunbo Abiru (APC, Lagos East), during a statutory engagement with CBN Governor, Mr. Yemi Cardoso.
Senator Abiru, in his opening remarks, underscored the critical role of the CBN in fostering macroeconomic stability and strengthening Nigeria's financial system. He emphasized the importance of such oversight meetings in ensuring transparency, reinforcing the bank's statutory responsibilities, and promoting effective policy communication.
Key Positive Indicators Highlighted by the Senate:
The Senate Committee pointed to several "encouraging developments" since their last engagement with the CBN in December 2024:
Moderating Inflation: A notable achievement cited was the moderation in the inflation rate, which has reportedly eased to 22.97 percent in May 2025 from 23.71 percent in April 2025. This suggests a positive trend after a period of rapid increases.
Gradual Increase in External Reserves: The committee acknowledged a gradual accretion to Nigeria's external reserves, which are crucial for exchange rate stability and meeting international obligations.
Improved Exchange Rate Stability: The Senate noted a relative stability in the exchange rate, with a "significant convergence" between the official and parallel market rates. This is attributed to the CBN's reform measures, including the Foreign Exchange Matching System and FX Code, aimed at deepening market transparency.
Strategic Pause in Rate Hikes: The Monetary Policy Committee (MPC) of the CBN was commended for maintaining the Monetary Policy Rate (MPR) at 27.50 percent in its February and May 2025 meetings. This decision was described as a "deliberate pause" from the aggressive rate hikes witnessed in 2024, signaling a "more balanced approach to controlling inflation whilst supporting economic growth."
Pragmatic Regulatory Flexibility: The Senate also acknowledged the CBN's decision to grant "limited but flexible regulatory forbearance" to Deposit Money Banks amidst the ongoing recapitalization effort. This policy was lauded as a "pragmatic approach" to easing transitional pressures on financial institutions without compromising overall financial stability, crucial for the government's target of a US$1 trillion GDP by 2030.
Renewal of Bilateral Currency Swap with China: The committee also commended the renewal of the bilateral currency swap agreement between Nigeria and China, seeing it as a step towards diversifying Nigeria's external reserves and reducing dependence on the U.S. dollar.
CBN's Strategic Vision:
Governor Cardoso, during his briefing, reiterated that these reforms and policy shifts are part of a broader agenda to strengthen the Nigerian economy and ensure sustainable growth in the coming years. He emphasized that the ongoing banking-sector recapitalization is a "potent catalyst" for the administration's 2030 economic-growth vision.
Challenges Remain:
While the commendation from the Senate indicates positive progress, it's important to note that the economic landscape still presents significant challenges. Even Senator Abiru acknowledged that "other areas still require serious improvement," which were to be discussed with the CBN governor in a closed-door session. These challenges likely include addressing the root causes of inflation, improving food security, and sustaining the gains in exchange rate stability.
The Senate's endorsement provides a morale boost for the CBN and the government's economic team, suggesting that their recent policy direction is yielding some desired results. However, the true impact on the lives of ordinary Nigerians will be the ultimate measure of success as the country navigates its economic complexities.
