Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, says the naira is grossly undervalued.
He added that the apex bank was putting necessary measures in place to reverse the trend and make the naira to attain its real value.
The naira which traded around N400 at the parallel market to one dollar in May 2023 on Wednesday deprecated to N1,370.
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Cardoso spoke on Wednesday at the unveiling of the Nigerian Economic Summit Group (NESG) 2024 Macroeconomic Outlook Report in Lagos.
He said, “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 time.”
Commenting on the fuel situation, the CBN governor explained that pump prices of Premium Motor Spirit (PMS) will stabilise or drop this year when public and private-owned refineries begin operation.
The drop, he said, would have far-reaching effects on the various sectors of the economy.
He also spoke on measures by the CBN to strengthen the naira and crash the inflation rate from 28.92 to 21.4 per cent.
The unification of exchange rates and floating of the naira by President Bola Ahmed Tinubu at the inception of his administration are part of the bold moves to reform the economy.
However, this has led to a big devaluation in naira exchange to the dollar.
“The expected stabilisation or reduction in fuel costs is poised to have far-reaching implications across various sectors, contributing significantly to overall economic efficiency and resilience”, Cardoso said.
The report highlighted some economic outcomes of achieving a stable and appropriate pricing of the exchange rate.
A report by The Nation says Dangote Refinery, a private initiative, has begun production of diesel and aviation fuel, the Port Harcourt Refinery owned by the Federal Government is expected to begin production soon.
Cardoso acknowledged the challenges facing the economy and its resistance to solutions but assured Nigerians that the nation is now at a turning point due to the bold reforms undertaken by the Bola Tinubu administration.
