The Worldwide Financial Fund (IMF) has backed the Central Bank of Nigeria’s (CBN) sustained tight financial coverage stance, describing it as a vital instrument in managing inflation and safeguarding macroeconomic stability.
In its newest 2025 Article IV Session Report on Nigeria, the IMF said that the CBN’s disinflationary measures are acceptable and needs to be maintained till inflation expectations are firmly anchored.
The Fund’s Administrators expressed broad assist for Nigeria’s financial coverage framework whereas urging continued fiscal and structural reforms to enrich these efforts.
“Administrators agreed that the Central Bank of Nigeria is appropriately sustaining a good financial coverage stance, which ought to proceed till disinflation turns into entrenched,” the IMF said.
At its landmark three hundredth Financial Coverage Committee (MPC) assembly held on Could 20, 2025, the CBN held the Financial Coverage Price (MPR) at 27.50%. The Money Reserve Ratio (CRR) remained elevated at 50% for industrial banks and 16% for service provider banks.
These coverage instruments are designed to tighten liquidity, cut back speculative pressures on the naira, and include inflation, which has hovered at multi-decade highs in recent times.
The IMF recommended the CBN for discontinuing deficit monetization, a follow that beforehand contributed to inflation, and welcomed the establishment’s dedication to strengthening governance as a basis for clear inflation focusing on.
The IMF lauded latest reforms in Nigeria’s overseas trade (FX) market, highlighting that latest actions have improved worth discovery, market liquidity, and investor sentiment.
“The Administrators known as for implementation of a sturdy overseas trade intervention framework targeted on containing extra volatility, stressing that the trade charge is a vital shock absorber,” the report added.
They urged Nigerian authorities to step by step section out capital movement administration (CFM) measures, in a fastidiously timed and sequenced method, to unlock higher FX market effectivity whereas lowering distortions.
Whereas supporting financial tightening, the IMF additionally emphasised the significance of a impartial fiscal stance, suggesting that authorities spending ought to give attention to growth-enhancing investments, together with infrastructure, agriculture, and social welfare.
The Fund famous important progress in areas resembling tax reform, particularly efforts to boost income mobilization and create fiscal house for growth tasks with out compromising debt sustainability.
“Administrators recommended the development of the tax reform invoice—an essential step in broadening Nigeria’s income base,” the IMF mentioned.
On social safety, the IMF inspired Nigerian authorities to speed up the rollout of money switch programmes to cushion the impression of {economic} adjustment on susceptible populations.
The report additionally acknowledged Nigeria’s progress in banking sector stability. Administrators welcomed the continuing recapitalization efforts aimed toward rising banks’ minimal capital, in addition to initiatives to advertise {financial} inclusion and deepen capital markets.
Additionally they emphasised the necessity for strong risk-based supervision, significantly for mortgage schemes, client lending, and the rising fintech and crypto sectors.
According to world compliance requirements, the IMF praised Nigeria’s efforts in strengthening its Anti-Cash Laundering and Countering the Financing of Terrorism (AML/CFT) framework however burdened the urgency of addressing remaining gaps to facilitate the nation’s exit from the FATF gray checklist.
To sustainably enhance {economic} progress, the IMF known as on Nigeria to deal with long-standing structural limitations. These embrace:
Moreover, the Fund emphasised the significance of easing constraints on personal sector credit score to foster entrepreneurship and assist inclusive progress.
