IMF Cautions Nigeria Against Amendment Of CBN ACT

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The International Monetary Fund (IMF) has cautioned against the proposed amendment to the Act establishing the Central Bank of Nigeria (CBN), which it said could weaken the bank’s autonomy.

The IMF alternatively called for the strengthening of Nigeria’s apex bank, against such move.

The position of the Fund was contained in the Article IV Staff Consultation Report of the Board of Governors of the global organization, which was released in Washington, Thursday afternoon.

It said, “Directors supported the authorities’ intentions to shift to an inflation targeting regime and recommended strengthening central bank independence and communication to ensure a successful transition.

“They recommended caution regarding amendments to the Central Bank of Nigeria (CBN) Act that might weaken the central bank’s autonomy.

 

“They encouraged further progress in implementing the outstanding recommendations from the 2021 safeguards assessment.

“Directors commended the authorities for restarting the cash transfer program and emphasized the urgency of scaling it up to mitigate acute food insecurity.

“They welcomed the authorities’ work on a comprehensive revenue mobilization strategy including boosting tax enforcement and broadening the tax base.

“They stressed the importance of keeping a tight monetary policy stance to put inflation on a downward path, maintaining exchange rate flexibility, and building reserves.

 

“Directors welcomed the removal of foreign exchange market distortions and encouraged the authorities to continue improving the functioning of the FX market, including by adopting a well-designed FX intervention framework.”