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The Central Bank of Nigeria (CBN) Governor, Yemi Cardoso, has asserted that the Nigerian naira is currently undervalued. He has pledged to facilitate genuine price discovery in the near term, especially in conjunction with coordinated fiscal measures to promote a more balanced and stable exchange rate.
Speaking at the 2024 Macroeconomic Outlook of the Nigerian Economic Summit Group (NESG) on Wednesday, Cardoso also outlined the CBN’s focus on achieving an inflation rate of 21.4% within its inflation-targeting framework.
Cardoso emphasized the potential impact of anticipated reductions in pump prices of Premium Motor Spirit (PMS) due to improved operational status of government and private-owned refineries in 2024. He highlighted the positive implications for various sectors, contributing significantly to overall economic efficiency and resilience. The CBN’s inflation-targeting policy aims to rein in inflation to the targeted rate of 21.4%, supported by increased agricultural productivity and a reduction in global supply chain pressures.
The adoption of an inflation-targeting framework involves transparent communication, effective use of monetary policy instruments, and collaboration with fiscal authorities to achieve price stability and positively influence consumer behavior, according to Cardoso. He stressed that the anticipated decline in inflation would greatly benefit businesses by providing a more predictable cost environment, potentially leading to lower policy rates, stimulating investment, fostering growth, and creating job opportunities.
