IMF Projects Nigerian Inflation to Avg. 19% in 2022

Nigeria’s inflation is predicted by the International Monetary Fund (IMF) to reduce to an average of 19% by the end of this year and further decline to 17% by 2023 as a result of the tightening measures implemented by the Central Bank of Nigeria (CBN).
The Monetary Policy Committee tightened liquidity by raising the Cash Reserve Requirement to 32.5% and increasing the benchmark interest rate from 14.5% to 15.5%. Division Chief, Research Department, IMF Daniel Leigh stated that the country’s monetary policies will reduce the country’s escalating inflation, which was 20.52 percent as of August 2022, when speaking at the 2022 IMF/World Bank Annual Meetings.

“For Nigeria, we predict inflation at roughly 19% this year, but some reduction down to 17% next year,” he said. “Part of that does reflect the monetary policy initiatives, which is the 4% point rise in Nigeria’s Central Bank as well as the fall that we expect in oil and food prices globally.”

Pierre-Olivier Gourinchas, the director of the IMF’s research division, said: “Our advice in general is that central banks should start with the traditional instruments of monetary policy and as you want to think about non-conventional instruments then you should think about what is the friction preventing the conventional monetary policy from working it will require a country or a central bank to deploy alternative ways of charting a course for monetary policy.”