Yemi Cardoso, the governor of the Central Bank, said that the naira is undervalued and pledged that the bank will strive toward true price discovery in the foreign exchange market in 2024.
This was said by Mr. Cardoso during his video conference keynote speech at the Nigeria Economic Group perspective for 2024.
Cardoso claims that the central bank would implement measures to control inflation by working with the Ministry of Finance, which oversees fiscal policy, and by using monetary policy tools.
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Additionally, he pledged to uphold discipline in the FX market and take swift action against any violations or misuses.
He stated, “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. This coordinated approach will contribute to a more balanced and stable exchange rate”
The naira traded at N878.61 on the official market according to Nairametrics daily FX monitor yesterday but recorded N1360/$1 on the unofficial market.
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On increasing the FX reserves, Mr Cardoso stated that the bank’s partnership with the Ministry of Finance and NNPCL ensures all foreign exchange inflow is returned to the bank as it will result in the accretion of the country’s foreign reserve.
The Governor also noted that the anticipated resumption of operations in the three refineries across the country will contribute to a reduction in the pump prices of PMS which is a major contributor to the CPI basket.
He also noted that the inflation outlook is geared towards increasing economic growth and a more predictive cost environment.
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He stated, “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%,”
“The outlook for decreasing inflation in 2024 will have a profound impact on businesses, providing a more predictable cost environment and potentially leading to lower policy rates, stimulating investment, fueling growth, and creating job opportunities,”
