Posted by Samuel on Wed 23rd Oct, 2024 - tori.ng
This was stated during the launch of its global financial stability report in Washington DC on Tuesday.
Despite the decline of the Naira, the International Monetary Fund (IMF) has noted that Nigeria's local currency is showing signs of stabilization under the leadership of President Bola Tinubu.
Currently at the parallel market, the dollar exchanges at over N1600.
This development according to the IMF was attributed to in interest rate hikes.
This was stated during the launch of its global financial stability report in Washington DC on Tuesday.
According to the IMF, the stability can be linked to the currency’s stability to the clearing of the foreign exchange backlog by the Central Bank of Nigeria (CBN).
“… in Nigeria, rate hikes and the clearing of overdue domestic central bank foreign exchange obligations have helped the naira show more signs of stability,” the IMF said.
It would be recalled that the CBN had announced the successful settlement of all verified outstanding foreign exchange (FX) obligations.
The Central Bank of Nigeria under Governor Olayemi Cardoso has continued to hike interest rates.
In August 2024, it was noted that the lending rate was increased to 31.75 percent by the Central Bank of Nigeria.
The apex bank further revealed that commercial and merchant banks would earn a 19 percent interest rate on deposits above N3 billion in its Standing Deposit Facility (SDF).
Devaluation of naira has been blamed in part for economic issues faced by Nigerians, including growing inflation for the import dependent economy.