The governor of Central Bank of Nigeria (CBN), Yemi Cardoso, has declared that the Nigerian currency, naira is undervalued, promising to expedite discovery of genuine price in near term.
He said, “We believe that the naira is currently undervalued, and coupled with the coordinated measures on the fiscal side, we will expedite genuine price discovery in the near term. This coordinated approach will contribute to a more balanced and stable exchange rate.”
The CBN Governor, who spoke at the 2024 Macroeconomic Outlook of the Nigerian Economic Summit Group (NESG) on Wednesday, also said that the apex bank is looking at an inflation rate of 21.4 per cent under its inflation targeting regime.
“The anticipated moderation in pump prices of PMS, due to the expected operational status of the country’s government and private-owned refineries in 2024 is a pivotal factor in the economic equation.
“The economic stabilisation or reduction in fuel cost is poised to have far-reaching implications across various sectors, contributing significantly to overall economic efficiency and resilience. Inflationary pressures are expected to decline in 2024 due to the CBN’s inflation-targeting policy, which aims to rein in inflation to 21.4 per cent.
“This will be aided by improved agricultural productivity and the easing of global supply chain pressures, benefiting businesses by boosting consumer confidence and purchasing power,” Cardoso said.
The adoption of inflation targeting framework according to the CBN Chief, involves clear communication, use of monetary policy instruments and collaboration with fiscal authorities to achieve price stability and positively influence consumer behaviour.
He maintained that declining inflation will have a great impact on businesses, providing a more predictable cost environment and potentially, leading to lower policy rates, stimulating investment, stimulating growth and creating job opportunities.
