The threat to CBN autonomy is also disturbing. Global best practice prescribes central banks’ independence to enhance policy coherence and sturdiness… - Sarah Alade

The monetary policy of the Central Bank of Nigeria in recent times has continued to focus on achieving price and financial stability for economic growth and development. The persistent inflation in the last one year is an issue of concern.

Taking these factors together, the effect on the Nigerian economy has been the significant decline in the country’s foreign reserves, depreciation of the Naira and substantial increase in consumer prices. To reverse the trend and put the economy back on a path to economic recovery, significant effort is needed on the part of the Federal Government, especially harmonization of its fiscal and monetary policies to boost aggregate demand and investor confidence.

Key global trends such as Brexit, the rising wave of populist and anti-globalization sentiments anchored by emerging bilateralism, divergent monetary policy stance of the advanced central banks and disorderly commodity price movements will also affect monetary policy at home. These global developments coupled with domestic factors will make monetary policy management very difficult this year. Based on these, monetary policy management in Nigeria must be diligent and collaborative to achieve its objectives of price stability in the home front.