The International Monetary Fund (IMF) has acknowledged that the Nigerian naira is currently under pressure and stated that Nigeria is free to explore the option of obtaining a loan from the IMF to stabilize its currency. The IMF also noted that recent exchange rate reforms and measures taken by Nigerian authorities are deemed appropriate.

This statement was made during the World Bank Group/International Monetary Fund Meeting in Marrakech, Morocco. The IMF reported that inflation in Nigeria remains high at 26 percent as of August, and the naira continues to face pressure. Following the exchange rate reforms initiated by President Bola Tinubu, the local currency has steadily depreciated, with exchange rates reaching as high as 1045 naira to a dollar in the parallel market.

The IMF recommended tightening monetary policy by increasing the Monetary Policy Rate and mopping up excess naira liquidity. It also stressed the importance of providing more clarity regarding the Central Bank of Nigeria’s dollar obligations.

While acknowledging that Nigeria could seek IMF financing, the IMF clarified that the Nigerian authorities had not approached the IMF with a request for financing. The IMF expressed confidence in the new leadership of the Central Bank of Nigeria, led by Olayemi Cardoso, and the new Minister of Finance and Coordinating Minister of the Economy, Wale Edun, to make the right decisions to boost the country’s economy.

Cardoso outlined a preliminary assessment of challenges facing the Central Bank of Nigeria and introduced high-level proposals aimed at addressing reform challenges, including fiscal reforms and growth targets with the aim of achieving a $1 trillion GDP within eight years. The proposals also focus on addressing inflation, price stability, and the backlog of foreign exchange demand.

The new central bank governor is also looking to limit the central bank’s fiscal interventions and implement a wide-ranging reform program to support economic growth and development in Nigeria.