IMF advice Nigeria to adopt unified exchange rate

International Monetary Fund

The International Monetary Fund (IMF)  on Tuesday advice  Central Bank of Nigeria during the unveiling of the World Economic Outlook report released in Washington DC

The IMF team, said there was a need for the government to come up with measures to boost the non-oil revenue in order to spend more on social safety programmes.

Nigeria to unify the country’s exchange rate system in order to avoid situations where public and private sector decisions are distorted due to uncertainties.

Under the exchange rate system, the CBN has Investors and Exporters Forex Window; the CBN official rate; the parallel market rate; the Retail Secondary Market Intervention Sales and the wholesale SMIS.

According to the IMF Economic Counsellor, Gita Gopinath, and the Chief of the World Economic Studies Division of the IMF’s Research Department, Oya Celasun,  described per capital growth in Nigeria as weak, adding that strong measures were needed to lift the growth into positive territory.

Under the exchange rate system, the CBN has Investors and Exporters Forex Window; the CBN official rate; the parallel market rate; the Retail Secondary Market Intervention Sales and the wholesale SMIS.

“Nigeria has one of the lowest rates of revenue in the world and this is hit hard by drop in oil prices. That is essential for the country to spend more on priorities, such as social safety and infrastructure.

The current account’s shift to a deficit is expected to persist while the pace of capital outflows continues to weigh on international reserves. Inflation will likely pick up in 2020 following rising minimum wages and a higher VAT rate, despite a tight monetary policy.

“Other areas are the need for a tight monetary policy and a simpler unified exchange rate system. Foreign exchange restrictions have also been distorting public private and public sector decisions and holding back investments.”

 

Source: .imf.org

 

 

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