Senate commends CBN’s mid-year economic performance

The Senate on Wednesday gave the Central Bank of Nigeria (CBN) a nod of approval for what it described as notable progress in Nigeria’s financial and monetary environment over the past six months.

This commendation came through the Senate Committee on Banking, Insurance, and Other Financial Institutions, led by Senator Adetokunbo Abiru (APC, Lagos East), during a scheduled oversight meeting with CBN Governor Yemi Cardoso.

In his opening statement, Senator Abiru underscored the importance of the CBN’s role in maintaining macroeconomic stability and strengthening the country’s financial system. He noted that the session was essential for ensuring transparency, reinforcing the bank’s statutory responsibilities, and fostering effective policy communication.

Reflecting on developments since their last engagement in December 2024, Abiru highlighted several positive indicators. “There have been encouraging developments in the Nigerian financial and monetary landscape,” he said. “These include a moderation in the inflation rate down to 22.97 per cent in May 2025 from 23.71 per cent in April; a gradual increase in external reserves; and improved exchange rate stability, with a narrowing gap between the official and parallel markets.”

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He attributed these trends to reforms by the CBN, such as the implementation of the FX Matching System and FX Code, which have contributed to greater transparency and discipline in the foreign exchange market.

The committee also praised the decisions of the CBN’s Monetary Policy Committee, especially its choice to maintain the Monetary Policy Rate at 27.50 per cent during its February and May 2025 meetings.

“This marked a strategic pause from the rate hikes of 2024,” Abiru said, “and signals a more balanced approach to controlling inflation whilst supporting economic growth.”

Abiru also acknowledged the CBN’s decision to allow limited regulatory flexibility for Deposit Money Banks amid the ongoing recapitalisation effort, describing it as a “pragmatic approach to easing transitional pressures without compromising financial stability.”

He further applauded the renewal of Nigeria’s bilateral currency swap agreement with China, which facilitates trade settlements in local currencies and supports efforts to diversify the country’s external reserves away from dependence on the U.S. dollar.

The committee also took note of the CBN’s launch of the Non-Resident Bank Verification Number (NRBVN) initiative aimed at improving Know-Your-Customer (KYC) protocols for Nigerians living abroad and foreign account holders.

“This measure is a significant step in broadening access to formal banking and maintaining financial integrity in a globalised economy,” Abiru added.

Despite these advancements, the senator noted that there are still critical areas requiring attention, which he said would be discussed privately during a closed-door session with the CBN governor.

Before the executive session commenced, Governor Cardoso provided an overview of the bank’s recent achievements and strategic priorities.

“To support the vision of a $1 trillion GDP by 2030,” he explained, “the Bank has embarked on a forward-looking recapitalisation of the banking sector, an essential move to propel this goal.”

The CBN governor emphasised that these reforms and policy shifts are part of a broader agenda to strengthen the economy and ensure sustainable growth in the years ahead.