Naira is undervalued – CBN boss Cardoso

Olayemi Cardoso, governor of the Central Bank of Nigeria (CBN), has stated that the naira is currently undervalued.

Cardoso was speaking at the 2024 macroeconomic outlook launch hosted by the Nigerian Economic Summit Group (NESG) on Wednesday, January 24.

He said the apex bank will accelerate genuine price discovery in the near term combined with coordinated measures on the fiscal side and that the CBN has reverted to the conventional monetary policy approach with a focus on achieving price stability, which fosters sustainable economic growth.  

“We believe that the naira is currently undervalued,” Cardoso said.

In 2023, the inflation continued on an upward trend, rising to 28.92 percent in December.

He said inflationary pressures are expected to reduce in 2024.

Cardoso also said the apex bank aims to rein in inflation to 21.4 percent in 2024.

“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%,” he said.

“The CBN 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 lower policy rates.”