Nigeria central bank targets inflation decline to 21.4%

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© Reuters. FILE PHOTO: Central Bank of Nigeria’s logo is seen on the headquarters building in Abuja, Nigeria January 22, 2018. REUTERS/Afolabi Sotunde/File Photo

By Elisha Bala-Gbogbo

ABUJA (Reuters) – Nigeria’s central bank is targeting an inflation decline to 21.4%, Governor Olayemi Cardoso said on Wednesday, adding that bank officials thought the country’s naira currency was undervalued.

Cardoso faces pressure to raise interest rates when policymakers at the Central Bank of Nigeria (CBN) hold a rate-setting meeting next month for the first time since he took office in September.

Inflation hit its highest level in more than 27 years in December at 28.92%.

“Inflationary pressures are expected to decline in 2024 due to the CBN’s inflation-targeting policy, which aims to rein in inflation to 21.4%,” Cardoso said in a speech, a copy of which the central bank shared by email.

Cardoso added that improved agricultural output and the easing of global supply chain pressures would help boost consumer confidence and purchasing power.

The central banker emphasised that the CBN was committed to improving liquidity in the foreign exchange market, reiterating a pledge to clear outstanding FX obligations estimated at $5 billion.

“We believe that the naira is currently undervalued and, coupled with coordinated measures on the fiscal side, we will expedite genuine price discovery in the near term,” he said in the speech at an event on the economic outlook.

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