The International Monetary Fund (IMF) has recognized the ongoing pressure on the Nigerian naira and has suggested that Nigeria could explore the option of seeking a loan from the IMF to stabilize its currency if deemed necessary.
The IMF further endorsed recent exchange reforms and measures taken by Nigerian authorities as appropriate. These statements were made during the World Bank Group/IMF Meeting held in Marrakech, Morocco.
As of August, the IMF reported that inflation in Nigeria remained persistently high at 26 percent, while the Nigerian naira continued to face significant pressure.
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The domestic currency, which had depreciated from approximately 450 naira to the dollar to an average of 760 naira to the dollar after President Bola Tinubu’s exchange reforms, continued to decline in the parallel market, reaching 1045 naira to the dollar on a recent Thursday.
In addition, the new Central Bank governor, Olayemi Cardoso, intends to introduce restrictions on the Central Bank of Nigeria’s fiscal interventions and is considering measures to address inflation and maintain price stability.
Cardoso emphasized the need for an in-depth review of the mechanisms currently in place, potential adjustments, and the introduction of new tools to address these issues.
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He stated, “The economic policy proposals of the administration identify a set of fiscal reforms and growth targets that will achieve $1 trillion in GDP within eight years.”
A review of selected BRICS and MINT nations, which share similar characteristics with Nigeria, reveals key macroeconomic indicators that could guide Nigeria’s economic path if the proposed reforms are diligently implemented.
Economies surpassing $1 trillion typically exhibit indicators such as moderate inflation, substantial foreign reserves, and the ability to swiftly recover from cyclical economic downturns.