The International Monetary Fund in its concluded Article IV consultation with Nigeria has urged the Central Bank of Nigeria to consider a well-designed foreign exchange intervention framework to ensure the stability of the currency.
The IMF applauded the removal of foreign exchange market distortions and encouraged the authorities to continue improving the functioning of the FX market.
The directors of the International Monetary Fund gave kudos to the Federal Government of Nigeria for their actions to rein in inflation and restore market confidence.
There was the emphasis of the importance of keeping a tight monetary policy stance to put inflation on a downward path, maintaining exchange rate flexibility, and building reserves.
Following monetary policy tightening in February and March 2024 and a resumption of FX interventions, the naira has started to stabilise, the IMF said.
There was also the warning that amendments to the CBN Act if not done carefully can weaken the Central Bank’s autonomy.
They encouraged further progress in implementing the outstanding recommendations from the 2021 safeguards assessment.
Increased monitoring of financial sector risks and increase in the minimum capital for banks and unwinding to the regulatory forbearance introduced during the pandemic was recommended by the Central Bank of Nigeria.
