Nigeria’s central bank pledged to restore price stability and steady the country’s battered currency, signaling tighter monetary policy ahead.

“The Central Bank of Nigeria is committed to achieving monetary and price stability,” Governor Olayemi Cardoso said on Friday. “We are witnessing clear progress in stabilizing the foreign exchange market.”

In his first policy speech since taking office in September, Cardoso’s remarks were under scrutiny for evidence he has a plan to tackle surging price pressures and currency weakness. The naira has weaken by around 40% against the dollar since June.

“As part of this new focus, the CBN has just approved the adoption of an explicit inflation-targeting framework to enhance the effectiveness of monetary policy,” he said, adding that the details were being worked out.

The central bank raised rates by 25 basis points to 18.75% when it last met in July. Inflation since then has risen from 22.8% to an 18-year high of 27.3%.

Cardoso said that inflation will be effectively managed by tightening monetary conditions during the next two quarters.

Cardoso’s stance signals a willingness to defend the autonomy of the central bank. President Bola Tinubu has previously called for lower lending rates to kick-start growth.

But the governor’s resolve may be tested after data earlier Friday showed economic growth in the three months through September of 2.54% from a year earlier. Economists polled by Bloomberg had expected the economy to expend by 2.85%.

--With assistance from Ruth Olurounbi and Emele Onu.

Author: Nduka Orjinmo and Anthony Osae-Brown