The International Monetary Fund has endorsed the Central Bank of Nigeria’s decision to cut its benchmark interest rate to 23 per cent, saying the move is justified by progress in taming inflation, although monetary policy remains tight.
Director of the IMF’s African Department, Zeine Ould Zeidane, said Nigeria had made significant gains in reducing inflation after a period of elevated price pressures and high real interest rates.
Speaking at a press briefing during the ongoing IMF-World Bank Annual Meetings in Thailand, Zeidane said the CBN was right to begin normalising interest rates without abandoning its fight against inflation.
He said the September adjustment should not be mistaken for a broad shift towards an accommodative monetary policy, as the overall stance remains restrictive.
“The stance itself remains a tight one,” Zeidane said, adding that the CBN’s decision was appropriate under the prevailing economic conditions.
