Let exchange rate reflect market forces, IMF tells Nigeria

Managing Director of the International Monetary Fund, Christine Lagarde

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Bayo Akinloye

The International Monetary Fund has called on the Federal Government to let the exchange rate reflect market forces.

It also urged the government to remove its restrictions on access to foreign exchange while it works to improve the functioning of the interbank foreign exchange market.

In a statement made available to our correspondent on Wednesday by the global financial body, the President Muhammadu Buhari administration was urged to reduce the cost of doing business in the country through the promotion of transparency and accountability.

“Eliminating existing macroeconomic imbalances and achieving sustained private sector-led growth requires a renewed focus on ensuring the competitiveness of the economy. As part of a credible package of policies, the exchange rate should be allowed to reflect market forces more and restrictions on access to foreign exchange removed, while improving the functioning of the interbank foreign exchange market (IFEM).

 “It will be important for the regulatory and supervisory frameworks to ensure a strong and resilient financial sector that can support private sector investment across production segments (including SMEs) at reasonable financing costs. Staff is supportive of the authorities’ ongoing efforts to promote targeted and core infrastructure (in power, integrated transport network, housing); reduce business environment costs through greater transparency and accountability, promote employment of youth and female populations,” the IMF said.

The statement said Nigeria needed to make key reforms in areas such as the Petroleum Industry Bill, anti-money laundering and fighting the financing of terrorism.