Mr Olayemi Cardoso, Governor of the Central Bank of Nigeria (CBN), predicts that Nigeria’s inflation rate would fall from 28.92 percent to 21.4% by 2024.
Mr Cardoso made the remarks during his speech to the House of Representatives in Abuja on Tuesday.
“Inflationary pressures are expected to decline in 2024 due to the CBN’s inflation-targeting policy, aiming to rein in inflation to 21.4 per cent.
“This will be aided by improved agricultural productivity and easing global supply chain pressures.
“The CBN’s inflation-targeting framework involves clear communication and collaboration with fiscal authorities to achieve price stability, potentially leading to lowered policy rates, stimulating investment, and creating job opportunities,” he said.
He said that the Nigerian foreign exchange market was currently facing increased demand pressures, causing a continuous decline in the value of the Naira.
“The shift to a market-driven exchange rate is intended to create a stable macroeconomic environment and discourage currency hoarding.
“However, short-term volatilities are attributed to arbitrage and speculation.
“To address exchange rate volatility, a comprehensive strategy has been initiated to enhance liquidity in the FX markets.
“This includes unifying FX market segments, clearing outstanding FX obligations, introducing new operational mechanisms for Bureaux De Change, BDCs, enforcing the Net Open Position, NOP, limit, and adjusting the remunerable Standing Deposit Facility cap,” he said.
“These costs are temporary, and our decisions will address a lot of fundamental issues bothering Nigeria’s macroeconomic landscape.
“These measures, aimed at ensuring a more market-oriented mechanism for exchange rate determination, will boost foreign exchange inflows, stabilise the exchange rate, and minimise its pass-through to domestic inflation,” he added.
