The International Monetary Fund (IMF) has provided a forecast indicating a potential appreciation of the Nigerian naira against the US dollar in the official foreign exchange market. The prediction suggests that the naira could strengthen to as high as N2,081 against the US dollar over the course of the year.
According to legit.ng, IMF disclosed this in its February 2024 Post–Financing Assessment and Staff Report published on its website.
IMF makes observations about the naira According to the IMF, the naira may further depreciate by about 35% this year, potentially leading to an inflation rate peaking at 44%.
The global institution noted further that the nation’s monetary policy is insufficiently tightened to bring inflation below 20% while pressure on the Naira persists.
It added that the depreciation of the Naira will be caused by the absence of local production and the recent liberalization of commodity imports, Vanguard reports.
IMF advises the federal government
Following up on its observation, the IMF called for a comprehensive macroeconomic and growth strategy in collaboration with and supported by development partners.
It said this would include aggressive monetary tightening, fiscal adjustment to restore macroeconomic stability, and implementing climate adaptation measures.
It stressed that domestic demand had weakened due to the steep fall in real incomes, as investments in the oil sector would likely stall due to rising costs and production declines.
FG searches for a solution
Meanwhile, President Bola Tinubu has disclosed a plan by the federal government to raise at least $10 billion in order to increase FX liquidity, a key ingredient to stabilise the naira and grow the economy.
The federal government will be hoping to achieve an exchange rate of N800 as the foreign exchange (FX) rate benchmark for the 2024 budget to avoid a heavy fiscal deficit.
The latest Naira to Dollar exchange rate
Earlier, Legit.ng reported that the Nigerian currency recovered some of its lost value against the US dollar in both the black market and the official market
This happened after the federal government of Nigeria deployed security agencies against foreign exchange speculators
The FG has now issued a new order to the NCC to block Binance and other online platforms where Nigerians buy and sell dollars
