Cardoso Says Naira ‘Undervalued’ Targets 21.4% Inflation For 2024

Central Bank of Nigeria Governor Olayemi Cardoso said inflation will moderate this year and described the country’s naira currency as “undervalued,” in his first public comments on the economy since November.

“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 told an event Wednesday hosted by the Nigerian Economic Summit Group.

“The outlook for decreasing inflation in 2024 will have a profound impact on businesses, providing a more predictable cost environment and potentially leading to lower policy rates, stimulating investment, fueling growth and creating job opportunities,” he said via video link.

The central bank is expected to raise interest rates sharply when it meets next month. The gathering, which was only scheduled last week, will mark the first time the monetary policy committee has convened since July, when it raised rates to 18.75%.

Inflation since then has accelerated and stood close to a three-decade high of 28.9% in December.

Since taking office, Cardoso has hinted at a return to orthodox policies, a departure from his predecessor Godwin Emefiele, whose unorthodox approach to policy unnerved investors and led to a rapid slowdown in capital inflows into Nigeria.

The Central Bank of Nigeria (CBN) has adopted an explicit inflation targeting regime, and is committed to achieving monetary and price stability, Cardoso said, in September 2023, at his first policy speech since becoming governor.