Central Bank of Nigeria Governor Highlights Naira’s Undervaluation at NESG Event
In a significant revelation, Olayemi Cardoso, the Governor of the Central Bank of Nigeria (CBN), announced that the naira is presently undervalued.
Speaking at the 2024 macroeconomic outlook launch hosted by the Nigerian Economic Summit Group (NESG), Cardoso outlined the CBN’s approach to addressing this issue.
CBN’s Commitment to Genuine Price Discovery and Fiscal Coordination
Governor Cardoso emphasized the CBN’s commitment to accelerating genuine price discovery in the near term.
He outlined coordinated measures on the fiscal side to complement these efforts.
The central bank has reverted to a conventional monetary policy approach with a primary focus on achieving price stability, which, in turn, supports sustainable economic growth.
Inflation Trends and Anticipated Reduction in 2024
Examining the inflation landscape of 2023, Governor Cardoso noted a continual upward trend, culminating in a rise to 28.92 percent in December.
However, he expressed optimism, stating that inflationary pressures are expected to decrease in 2024.
CBN’s Inflation-Targeting Policy and Reduction Goals
Governor Cardoso revealed that the CBN aims to rein in inflation to 21.4 percent in 2024.
He outlined the central bank’s adoption of an inflation-targeting framework, involving clear communication, the use of monetary policy instruments, and collaboration with fiscal authorities to achieve price stability.
This strategic approach is expected to foster market confidence and positively influence consumer behavior.
Impact on Businesses and Predictable Cost Environment
Highlighting the potential impacts of decreasing inflation in 2024, Governor Cardoso emphasized the profound effects on businesses.
A more predictable cost environment is anticipated, potentially leading to lower policy rates.
The CBN’s outlook aims to provide stability, boosting market confidence and supporting businesses through a strategic alignment of monetary and fiscal policies.
Strategies for Inflation Reduction and Market Confidence
Governor Cardoso’s statements underscore the CBN’s commitment to steering the economy towards stability.
The outlined strategies, including inflation reduction and fostering market confidence, showcase the central bank’s proactive role in influencing consumer behavior and ensuring a conducive environment for economic growth.
In summary, Governor Olayemi Cardoso’s address at the NESG event outlines a comprehensive strategy for addressing the undervaluation of the naira, reducing inflation, and fostering economic stability in the coming year.
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