IMF proposes devaluation to reverse economic woes
From OKORO CHINEDU in Lagos, Nigeria
LAGOS, (CAJ News) – THE International Monetary Fund (IMF) has made a veiled recommendation for the devaluation of the Naira as part of measures to resuscitate the Nigerian economy.
This is among a number of recommendations made by the institute after the conclusion of consultations with Nigeria.
The mission concluded on Wednesday.
A statement after the conclusion of the consultation said directors noted that the policy approach of expansionary monetary policy, together with a relatively fixed exchange rate and exchange restrictions had adversely impacted economic activity.
IMF directors also raised concerns about the authorities’ commitment to their inflation objective.
“They underscored the need for credible adjustment to the large terms-of-trade shock, including through greater exchange rate flexibility and speedy unwinding of exchange restrictions to facilitate an exchange rate consistent with fundamentals,” IMF stated.
In this context, however, directors welcomed the recent monetary policy tightening and recommended that the central bank target price stability to maintain inflation within the target range.
IMF noted Nigerian economy is facing substantial challenges, linked to the fall in oil prices.
– CAJ News
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