The International Monetary Fund (IMF) has reported that Nigeria’s naira is stabilising due to interest rate hikes and the Central Bank of Nigeria’s (CBN) clearance of foreign exchange backlogs.
“In Nigeria, rate hikes and clearing overdue domestic central bank foreign exchange obligations have helped the naira show more signs of stability,” stated the IMF in its global financial stability report.
This development followed the CBN’s settlement of verified foreign exchange obligations, with $2.4 billion still under investigation.
The IMF attributes the naira’s stability to these efforts, despite criticisms from stakeholders on the CBN’s monetary policy decisions.
CBN Governor Olayemi Cardoso has implemented multiple interest rate hikes to curb inflation.
The latest increase, on September 24, raised the rate to 27.25%, sparking criticism from the Manufacturers Association of Nigeria (MAN) and the Lagos Chamber of Commerce and Industry (LCCI).
They argued that this policy would negatively impact manufacturing and hinder business expansion and sustainability.
IMF Financial Counsellor Tobias Adrian praised the CBN’s efforts, saying, “The central bank has transitioned to an inflation-targeting regime and liberalised the exchange rate, which we welcome, the rate hikes implemented so far have been appropriate, given the challenges posed by high inflation, around 30 percent.”
The World Bank noted that while the naira was among sub-Saharan Africa’s worst-performing currencies in 2024, it has stabilised in the past month, trading between N1,700-N1,600 per dollar in parallel markets and N1,500-N1,600 in official windows.
Boluwatife Enome
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