- The IMF has again advised the CBN to continue increasing interest rates to bring down inflation
- Nigeria's high inflation rate is forecasted to continue in 2023 and will affect economic growth
- President-elect Bola Ahmed Tinubu is expected to take over from President Muhammdu Buhari on May 29 and has been advised to stay the course
The International Monetary Fund (IMF) has urged the Central Bank of Nigeria (CBN) to continue its anti-inflation campaign ahead of the expected presidency of Bola Tinubu on May 29th, 2023.
The IMF's director of Research Department, Pierre-Oliver Gourinchas, gave the advice while releasing the World Economic Outlook report at the ongoing IMF/World Bank Spring meetings in Washington DC, Daily Trust reports.
In the outlook report titled A Rocky Recovery, IMF predicted that Nigeria's economy would grow at 3.2%.
However, the global institution noted that the growth will fall to 3.0% in 2024 when the new administration fully kicks off, Punch added.
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Speaking on Nigeria, Division Chief, Research Department, Daniel Leigh said:
“Our projections for Nigeria show a relatively stable forecast for this year. There is a slight increase, with a revision upward to 3.3% in 2022, and a similar projection of 3.2% for 2023, followed by a 3% projection for 2024.
"So, this is an economy with very high inflation as well and this is why we have a forecast of about 20 per cent for 2023.
Regarding the CBN's efforts to address inflation, the IMF has advised the apex bank to continue increasing interest rates. This is because Nigeria's inflation rate remains at one of its highest levels in history, reaching 21.91% in February 2023, despite the bank's monetary policy interest rate hike from 16.5% to 18% in March 2023.
The IMF believes that increasing the interest rate further will help bring down inflation.
“One of our main recommendations is to tighten the monetary policy to ensure that this inflation comes down towards the more target levels.”
CBN makes adjustments as Naira exchanges at an all-time low against US dollar
Meanwhile, in another report, Legit.ng revealed that the Central Bank of Nigeria (CBN) may have devalued the official Naira exchange rate against the United States dollar.
This differs from the exchange rate of N461 to a dollar band recorded in recent months.