The governor of the Central Bank of Nigeria (CBN), Yemi Cardoso, says Nigeria’s inflationary pressure will drop from 28.92 per cent to 21.4 per cent in 2024.

Mr Cardoso said this in Abuja on Tuesday when he addressed the House of Representatives.

“Inflationary pressures are expected to decline in 2024 due to the CBN’s inflation-targeting policy, aiming to rein in inflation to 21.4 per cent,” said the CBN governor.

He said improving agricultural productivity and easing global supply chain pressures would also contribute to reining in inflation.

“The CBN’s inflation-targeting framework involves clear communication and collaboration with fiscal authorities to achieve price stability, potentially leading to lowered policy rates, stimulating investment, and creating job opportunities,” he said.

He said the Nigerian foreign exchange market was currently facing increased demand pressures, causing a continuous decline in the value of the naira.

According to him, factors contributing to this situation include speculative forex demand, inadequate forex supply due to non-remittance of crude oil earnings to the CBN, increased capital outflows, and excess liquidity from fiscal activities.

“The shift to a market-driven exchange rate is intended to create a stable macroeconomic environment and discourage currency hoarding.

“However, short-term volatilities are attributed to arbitrage and speculation,” said Mr Cardoso.

The CBN governor said the apex bank had initiated a comprehensive strategy to address exchange rate volatility. He said this would enhance liquidity in the FX markets.

“This includes unifying FX market segments, clearing outstanding FX obligations, introducing new operational mechanisms for Bureaux De Change (BDCs), enforcing the Net Open Position (NOP) limit, and adjusting the remunerable Standing Deposit Facility cap,” Mr Cardoso said.

He said the steps taken had a huge economic cost impact on the citizenry.

“These costs are temporary, and our decisions will address a lot of fundamental issues bothering Nigeria’s macroeconomic landscape.

“These measures, aimed at ensuring a more market-oriented mechanism for exchange rate determination, will boost foreign exchange inflows, stabilise the exchange rate, and minimise its pass-through to domestic inflation,” he said.

(NAN )