THE International Monetary Fund (IMF) has urged the Central Bank of Nigeria (CBN) to get the country a unified exchange rate for the naira.
It remained stable at N378 to dollar on the CBN’s official rate.
The naira was on Sunday exchanging at N500 to dollar at the parallel market.
The currency got to a long-time low after weakening by N4 from N496 to dollar it closed on Friday.
The IMF said the Nigerian economy is struggling with multiple shocks and is expected to grow by -4.3 per cent in 2020 before a modest recovery in 2021(1.7 per cent).
The IMF said exchange rate rigidities have constrained the economy’s ability to absorb external shocks. It called for a unified exchange rate for the naira to promote growth and attract foreign capital.
According to the IMF, foreign exchange backlog and shortages are intensifying Balance of Payment (BoP) pressures insisting that exchange rate unification was imperative to reduce BoP risks.
IMF said the fiscal deficit will stay elevated in the medium term, while additional domestic revenue mobilisation is required to reduce fiscal risks.
The Fund further stated that fiscal transparency measures to be introduced to facilitate tracking.
It also advised that the dependence on Central Bank of Nigeria’s overdraft for fiscal funding should be annulled, adding that conflicting objectives have undermined monetary policy effectiveness.
The Fund advised that policy strategy should be strengthened to establish price stability.