WASHINGTON, D.C. — The International Monetary Fund (IMF) says the naira’s depreciation is “not necessarily a bad thing,” arguing a weaker currency can help Nigeria’s economy adjust to shocks and restore balance.
Speaking at a press briefing during the IMF–World Bank Annual Meetings, Tobias Adrian, the Fund’s Financial Counsellor and Director of Monetary and Capital Markets, said exchange rates serve as “important buffers,” adding that Nigeria’s recent steps to strengthen its policy framework are yielding results.
“A depreciating exchange rate may actually be a good thing to restore equilibrium,” Adrian said. He noted the IMF generally recommends more flexible exchange rates alongside credible monetary policy. According to him, Nigeria has improved monetary policy implementation, boosted revenue collection and increased transparency around foreign-exchange reserves — factors he linked to moderating inflation and stronger reserve positions.
“I think all of this has contributed to lower inflation from more than 30% last year to 23% this year, as well as improved FX reserve positions in Nigeria. So the direction of travel appears to be positive,” he said.
Adrian cautioned, however, that Sub-Saharan Africa still faces headwinds if global financial conditions tighten again. A reversal of capital flows could expose vulnerabilities in some economies, he warned, underscoring the need to keep improving fiscal and monetary fundamentals, strengthen debt management and advance structural reforms such as revenue mobilization — while seeking continued support from the international community.
On digital assets, Adrian welcomed the growing wave of stablecoin regulation. He estimated roughly $400 billion in stablecoins are outstanding worldwide, “largely a dollar phenomenon,” though euro, yen and pound-denominated coins also exist. He cited new U.S. legislation providing a regulatory pathway and similar regimes already in place in the European Union and Japan.
“We certainly welcome the steps towards regulations,” he said, pointing to the IMF’s February 2023 policy framework for crypto assets. While national approaches differ in implementation, he added, the overall direction “is aligned with our framework.”
