Turning the Corner: A New Compact between Nigeria's People and State
SECURING THE BENEFITS OF CRITICAL REFORM #1: THE NEW FX
POLICY
POLICY RECOMMENDATIONS TO FULLY TURN THE CORNER
•
Tighten monetary policy further
KEY BENEFITS: corrects
overvalued FX rate and
external imbalance, resolves
FX access problems by
allowing price to adjust
based on FX supply and
demand
KEY RISKS: inflation keeps
increasing. Then naira will
again become overvalued,
generating pressure to
depreciate, raising
inflation...risk of a spiral
•
·
•
.
Communicate the plan to swiftly phase out
monetization of the fiscal deficit via Ways and Means
Communicate the plan to phase out CBN development
finance schemes
Continue to build market confidence around free FX
pricing and evaluate and implement policies to channel
more FX supply into the NAFEM
Publish full information on progress towards clearing
the forwards backlog and on net reserves to build
market confidence
NIGERIA
THE WORLD BANK
IBRD ⚫IDA | WORLD BANK GROUP
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