- Says CBN Working Towards Genuine Price Discovery
- Nigerians To Buy Fuel At Cheaper Price After Three Refinery Begins Working
- Moves To Rein-In Inflation At Above 21% In 2024
The Governor of the Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso has unveiled plans to ensure that the domestic currency attains true price discovery in 2024.
This is even as asserted that the naira is grossly undervalued.
Cardoso stated this while delivering the keynote address at the unveiling of the Nigerian Economic Summit Group’s (NESG) 2024 Macroeconomic Outlook via video conference on Wednesday, January 24, 2024.
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“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” he stated.
Continuing, Cardoso disclosed that the apex bank will execute inflation-taming policies through monetary policy instruments and collaboration with the fiscal side of the economy which is the Ministry of Finance.
He also noted that the inflation outlook is geared towards increasing economic growth and a more predictive cost environment.
Hear him; “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”.
The Matrix had reported that in the National Bureau of Statistics’ latest report, Nigeria’s December inflation rate rose to 28.92 per cent.
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The 33.93 per cent food inflation rate has worsened inflationary pressures.
In a development that will gladden Nigerians, Cardoso hinted 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.
The CBN governor spoke on the back of the commencement of production at the Dangote Petroleum Refinery, as well as the completion of the mechanical phase repairs of the Port Harcourt Refinery.
While Dangote Refinery has already commenced operations, the Port Harcourt Refinery is expected to begin production soon.
“The expected stabilisation or reduction in fuel costs is poised to have far-reaching implications across various sectors, contributing significantly to overall economic efficiency and resilience”, he said.
He also promised to enshrine discipline in the forex market and promptly address any infractions and abuses.
On increasing the FX reserves, Mr Cardoso stated that the bank’s partnership with the Ministry of Finance and NNPCL will ensure that all foreign exchange inflow is returned to the bank as it will result in the accretion of the country’s foreign reserve.
In addition, Cardoso said the country is expected to achieve stability in the foreign exchange (FX) market this year, attributable to the reduction in petroleum products imports.
“These coordinated efforts will greatly enhance the bank’s FX inflows and contribute to the appreciation of reserves,” Cardoso said.
“The expected stability in the foreign exchange market for 2024 can be attributed to the reduction in petroleum products imports and the recent implementation of a market determined foreign exchange rate policy by the CBN.
“The reform is designed to streamline and unify multiple exchange rates, fostering transparency and reducing opportunities for arbitrage.”
According to the apex bank governor, the resulting consistent and stable exchange rate will not only boost investor confidence but also attract foreign investments, elevating Nigeria’s appeal to global investors.
“We are implementing a comprehensive strategy to improve liquidity in our FX market in the short, medium, and long-term. Our focus is on addressing fundamental issues that have hindered the effective operation of our markets over the years,” he said.
