CBN says Nigeria’s currency is undervalued
By Abimbola Tooki
Mr. Olayemi Cardoso, governor of Central Bank of Nigeria (CBN),
has said that the bank officials thought the country's naira currency was
undervalued.
The governor made this statement this morning while disclosing
that the apex bank is targeting an inflation decline to 21.4 per cent.
"We believe that the naira is
currently undervalued and, coupled with coordinated measures on the fiscal
side, we will expedite genuine price discovery in the near term," he said
in the speech at an event on the economic outlook.
Cardoso faces pressure to raise interest rates when policymakers
at the Central Bank of Nigeria hold a rate-setting meeting next month for the
first time since he took office in September.
Inflation hit its highest level in more than 27 years in December at
28.92 per cent.
"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,’’ Cardoso said in a speech, a copy of which the central bank
shared by email.
Cardoso added that improved agricultural output and the easing
of global supply chain pressures would help boost consumer confidence and
purchasing power.
He emphasised that the CBN was committed to improving liquidity in the foreign exchange market, reiterating a pledge to clear outstanding foreign exchange obligations estimated at $5 billion.
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