The International Monetary Fund (IMF) has thrown its weight behind the Central Bank of Nigeria’s (CBN) recent monetary policy measures, particularly the interest rate hikes and foreign exchange reforms.
The IMF has described these steps as crucial for stabilising Nigeria’s economy amid persistent inflation and currency challenges.
Tobias Adrian, the IMF’s financial counsellor and director of monetary and capital markets, expressed this support during a press conference at the IMF/World Bank annual meetings in Washington D.C., where the Global Financial Stability Report was presented.
“Nigeria is a good example,” Adrian remarked. “The central bank has transitioned to an inflation-targeting regime and liberalised the exchange rate, which we welcome. The rate hikes have been appropriate given the challenges posed by high inflation, which remains around 30 percent.”
The IMF acknowledged that while global inflationary pressures are beginning to ease, many Nigerians continue to face significant hardships due to rising prices and the aftermath of severe floods. Adrian stressed that the CBN’s vigilance remains crucial to stabilising the economy and protecting against external shocks.
The CBN’s recent foreign exchange interventions were also commended. Adrian highlighted how these measures had helped improve Nigeria’s financial stability, though he emphasised the need for continued structural reforms to ensure sustainable growth. “There is more to be done on structural issues to enhance the growth outlook,” he said, referencing long-term economic resilience.
The IMF further noted the importance of strengthening Nigeria’s financial system, pointing to ongoing efforts to ensure that banks remain well-capitalised and operate under sound regulatory frameworks. “We are actively working with Nigerian authorities to build capacity in the banking sector, which is essential for economic stability,” Adrian added.
With the IMF’s endorsement of CBN’s policies, investor confidence in Nigeria’s economic direction is expected to grow, particularly as inflation stabilises globally and funding conditions for frontier markets like Nigeria improve. Adrian concluded by saying, “The CBN’s proactive steps provide a foundation for long-term macroeconomic stability.”
This backing from the IMF could bolster the CBN’s strategy as Nigeria grapples with inflation, fiscal challenges, and currency devaluation.
