The International Monetary Fund has said that the recent depreciation of the Naira could help Nigeria’s economy adjust and strengthen its fiscal framework.
The International Monetary Fund (IMF) has said that the depreciation of the Naira is “not necessarily a bad thing,” noting that it can help restore balance in Nigeria’s economy.
Tobias Adrian, Financial Counsellor and Director of Monetary and Capital Markets at the IMF, made the comment during a press briefing at the Annual Meetings of the World Bank and IMF in Washington DC on Tuesday.
Responding to questions on Nigeria’s currency challenges, Adrian said, “A depreciating exchange rate is not necessarily a bad thing. It may actually be a good thing to restore equilibrium.” He added that Nigeria had taken steps to strengthen policy frameworks and move toward more flexible exchange rates.
According to him, improved revenue collection and greater transparency in foreign reserve management have contributed to reducing inflation from over 30 percent last year to 23 percent this year. “The direction of travel appears to be positive,” he said.
Adrian, however, warned that Sub-Saharan African economies remain vulnerable to global financial shocks and called for continued reforms in fiscal, monetary, and structural policies, including debt management and revenue mobilization.
He also commended global progress in regulating stable coins.