IMF Urges CBN to Sustain Anti-inflation Campaign Ahead of Tinubu’s Presidency, Makes Prediction

IMF Urges CBN to Sustain Anti-inflation Campaign Ahead of Tinubu’s Presidency, Makes Prediction

  • 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.

IMF NIgeria economic growth
IMF wants the CBN to continue increasing interest rate. Photo credit: @imf

In the outlook report titled A Rocky Recovery, IMF predicted that Nigeria's economy would grow at 3.2%.

Read also

IMF issues growth warning as it lowers 2023 forecast

However, the global institution noted that the growth will fall to 3.0% in 2024 when the new administration fully kicks off, Punch added.

PAY ATTENTION: Join Legit.ng Telegram channel! Never miss important updates!

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.

Read also

Nigeria's unemployment rate over 40%, says KPMG highest among 6 African countries

The IMF believes that increasing the interest rate further will help bring down inflation.

Leigh added:

“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.

The Nigerian currency, the Naira, has been trading at an all-time low against the dollar, above N463, since the start of the second quarter of 2023 (April 1, 2023).

This differs from the exchange rate of N461 to a dollar band recorded in recent months.

Source: Legit.ng

Authors:
Dave Ibemere avatar

Dave Ibemere (Senior Business Editor) Dave Ibemere is a senior business editor at Legit.ng. He is a financial journalist with over a decade of experience in print and online media. He also holds a Master's degree from the University of Lagos. He is a member of the African Academy for Open-Source Investigation (AAOSI), the Nigerian Institute of Public Relations and other media think tank groups. He previously worked with The Guardian, BusinessDay, and headed the business desk at Ripples Nigeria. Email: dave.ibemere@corp.legit.ng.

Online view pixel