CBN targets 21.4% inflation rate in 2024, says Cardoso

The Governor, Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso has disclosed that the apex bank in 2024 is targeting 21.4 per cent inflation rate.

The National Bureau of Statistics (NBS) disclosed that Nigeria’s annual inflation rate rose to 28.92 per cent in December 2023 from 28.20 per cent in November 2023.

Cardoso who was delivering his keynote address at the “launch of the Nigerian Economic Summit Group (NESG) 2024 Macroeconomic Outlook Report” in Lagos on Wednesday, said inflationary pressures are expected to decline in 2024 due to the CBN’s inflation-targeting policy, which aims to rein in inflation to 21.4 percent.

According to him, “This will be aided by improved agricultural productivity and the easing of global supply chain pressures, benefiting businesses by boosting consumer confidence and purchasing power.

“The CBN’s adoption of the inflation-targeting framework involves clear communication, use of monetary policy instruments, and collaboration with fiscal authorities to achieve price stability, fostering market confidence and positively influencing consumer behaviour.

“The outlook for decreasing inflation in 2024 will have a profound impact on businesses, providing a more predictable cost environment and potentially leading to lowered policy rates, stimulating investment, fueling growth, and creating job opportunities.

“Additionally, the Bank has reverted to the conventional monetary policy approach with a focus on attaining price stability, which fosters sustainable economic growth for Nigeria.”

On foreign exchange, he disclosed that the apex bank is collaborating with the Ministry of Finance and the NNPCL to ensure that all foreign exchange inflows are returned to the Central Bank.

“This coordinated effort will greatly enhance the Bank’s FX flows and contribute to the accretion of reserves,” he stated.

Cardoso stated that the expected stability in the foreign exchange market for 2024 can be attributed to the reduction in petroleum product imports and the recent implementation of a market-determined exchange rate policy by the CBN.

He stated that, “This reform is designed to streamline and unify multiple exchange rates, fostering transparency and reducing opportunities for arbitrage. The resulting consistent and stable exchange rate will not only boost investor confidence but also attract foreign investment, elevating Nigeria’s appeal to global investors.

“We are implementing a comprehensive strategy to improve liquidity in our FX markets in the short, medium, and long term.

“Our focus is on addressing fundamental issues that have hindered the effective operation of our markets over the years.

“Upholding the integrity of financial markets is crucial for building confidence. With the completion of an independent forensic review and the subsequent clearance of the backlog of valid FX transactions, we remain steadfast in our commitment to decisively address any infractions and abuses.

“In our efforts to stabilize the exchange rate, it is imperative that we prioritize transparency and create a market environment that enables the fair determination of exchange rates, ensuring stability for businesses and individuals alike.

“We believe that the naira is currently undervalued and, coupled with coordinated measures on the fiscal side, we will expedite genuine price discovery in the near term. This coordinated approach will contribute to a more balanced and stable exchange rate.”

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