The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has responded to concerns raised by Central Bank of Nigeria (CBN) Governor, Yemi Cardoso, regarding the impact of Federation Account Allocation Committee (FAAC) disbursements on the foreign exchange (FX) market.

Edun addressed these issues during a media briefing at the ongoing World Bank/IMF summit in Washington, D.C. He acknowledged the depreciation of the Naira but emphasized that the primary challenge in Nigeria’s FX market is the limited supply of foreign currency.

“The key issue in the foreign exchange market is really about supply,” Edun explained. “As an oil-producing country, we need to significantly boost our oil production. If we can ramp up output, it will ease the pressure on foreign exchange and improve supply, even during periods of large financial flows.”

Regarding efforts to control inflation, Edun commented on the current monetary policy stance. He noted that while Nigeria aspires to achieve single-digit interest rates, the CBN will maintain its tight monetary policy until inflation is decisively curbed.

He also highlighted the contrast between Nigeria’s situation and that of Western economies, where interest rates have started to decline. “Western economies can afford to lower their Monetary Policy Rates (MPR) because they have successfully brought inflation under control,” Edun said, reinforcing the need for Nigeria to remain focused on inflation management in the near term.

Edun’s remarks reflect the government’s strategy to address FX market challenges through increased oil production and to persist with monetary tightening as a tool to fight inflation.