In a recent announcement at the World Bank Group/International Monetary Fund Meeting in Marrakech, Morocco, the International Monetary Fund (IMF) expressed its support for Nigeria’s efforts to stabilize the naira, even as the currency continues to face significant inflationary pressures.
While the IMF noted that the Nigerian authorities had undertaken exchange reforms and other measures to address the situation, it also confirmed the naira’s persistent vulnerability.
Nigeria’s local currency, which had depreciated sharply after President Bola Tinubu’s exchange reforms, now stands at an average of N760 per US dollar in the official market and as low as N1047 per US dollar on the black market.
The IMF urged the need for tighter monetary policy through the raising of the Monetary Policy Rate and mopping up excess naira liquidity.
Also, they said the foreign exchange market could benefit from greater clarity regarding the Central Bank of Nigeria’s dollar obligations.
While questions were raised about the possibility of Nigeria seeking a dollar loan from the IMF to support the naira, the IMF clarified that Nigeria had not yet approached them with such a request.
However, they reminded that as an IMF member country, Nigeria has the option to seek financing if deemed necessary to address external imbalances.
The IMF also expressed confidence in the new leadership of the Central Bank of Nigeria under Olayemi Cardoso and the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, and their capacity to make decisions that would boost the Nigerian economy.
Cardoso and Edun had outlined various fiscal initiatives and policies aimed at increasing tax revenue, reducing waivers, stabilizing the market, and navigating the nation through its current economic challenges.
They are also considering a comprehensive assessment of the Central Bank to enhance its role in promoting economic growth and development.
The focus is on restoring stability to the naira and strengthening the nation’s economic prospects.
