The Governor of the Central Bank of Nigeria (CBN), Mr. Yemi Cardoso, has said that the bank will work towards real price discovery in the foreign exchange market this year.
This is as the CBN boss said, the naira is undervalued.
Cardoso, who stated this while delivering the keynote address at the Nigeria Economic Group outlook for 2024 via virtual conference, said the CBN will execute inflation-taming policies through monetary policy instruments and collaboration.
He promised to maintain discipline in the forex market and promptly address any infractions and abuses.
He said: “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.”
Speaking on increasing the FX reserves, the CBN governor 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.
The governor added 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.
“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 percent.
“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,” he said.
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