The Central Bank of Nigeria (CB) has cautioned that the country remains vulnerable to inflationary and financial risks despite recent signs of easing price pressures.
It, therefore, stressed the need for more market-based instruments to strengthen monetary policy transmission and attract investments. Ahead of the Monetary Policy Committee (MPC) meeting, scheduled to hold next week, the apex bank, which held firm on its tightening stance in July, stated disinflation remains too slow to justify any policy easing.
In personal statements by MPC members seen by Daily Sun on Tuesday, Governor Olayemi Cardoso, who chairs the MPC, said the bank is reviewing its liquidity management framework to ensure monetary stability is achieved without distorting markets.
“The sustained stabilization of monetary conditions naturally calls for a review of our approach to the implementation of our policy stance and the liquidity management framework to ensure effective monetary policy transmission.
“There is growing evidence of the need for the adoption of more market-based instruments to support the development of the yield curve and further promote savings and the stability of the financial system. The availability of these tools will be important for the management of the transition from a high reserve requirement environment without creating market distortions,” Cardoso explained.
