By Seyi Babalola
Wale Edun, Minister of Finance, is optimistic that Nigeria’s soaring inflation, which reached 34.19 percent in June, will reduce in the coming months.
Edun revealed this during a news conference in Abuja on Thursday.
According to him, the Federal Government’s fiscal management initiatives have improved in recent months, resulting in a favorable influence on Nigeria’s economy.
He said that the Central Bank of Nigeria, CBN, has been proactive in adjusting the interest rate which was raised to 26.75 percent on Tuesday to address inflation head-on.
He explained that the transition by CBN to a willing-buyer, willing-seller model has reduced exchange rate volatility and has improved volumes of foreign exchange trading.
He added that in the next 3-4 weeks the federal government will begin the first issuance of its dollar-denominated security of $500 million to attract foreign currency held by Nigerians abroad, adding that depending on the success of the issue, the government has no plans of raising euro bonds from the international market.
“We are optimistic that inflation, despite being sticky at the moment, will moderate soon, due to some of the commitments. Likewise, in terms of what is happening with interest rates, the gap between inflation and interest rates is narrowing.
“And what that does is it makes the Naira more viable as a store of value and reduces the incentive to switch to non-Naira investments,” he said.
