Governor of the Central Bank of Nigeria (CBN), Yemi Cardoso, has said the bank will work towards real price discovery in the foreign exchange market this year.
He said this has become necessary as it was the belief of the banking sector regulator that the naira is undervalued.
The CBN governor who gave the assurance while delivering the keynote address at the Nigeria Economic Group outlook for 2024 via video conference, further stated that the apex bank will execute inflation-taming policies through monetary policy instruments and collaboration with the fiscal side of the economy.
“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,” Cardoso stated.
He also promised to enshrine discipline in the forex market and promptly address any infractions and abuses.
Cardoso stated that the bank’s partnership with the Ministry of Finance and Nigeria National Petroleum Company Ltd (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.
On the cost of petrol and inflation, he said the expected resumption of operations in the three refineries across the country will contribute to a reduction in the pump prices of petrol which is a major contributor to the consumer price index basket, adding that the inflation outlook is geared towards increasing economic growth and a more predictive cost environment.
“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, fuelling growth, and creating job opportunities,” Cardoso stated.
