The IMF held discussions with the government and central bank before publishing a report this week in which it argues that the naira is overvalued by 18% and needs to be devalued.
The Nigerian authorities disagreed, telling the IMF that a lower naira would stoke inflation.
Nigerian inflation at 15.75% in December was at its highest rate in three years, driven by higher food prices.
There’s an element of the IMF being “tone deaf” in making public devaluation recommendations in that context, says Nkemdilim Nwadialor, a financial analyst at Chapel Denham Hill in Lagos. That made it easy for the authorities to reject what was “not the most helpful” advice, she says.
