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HomeTop NewsNigeria central bank remains "very independent" -new governor

Nigeria central bank remains “very independent” -new governor

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CBN Governor, Emefiele

Nigeria’s central bank remains “very independent,” newly appointed governor Godwin Emefiele said on Wednesday, dismissing fears of government interference after the president ousted the previous governor in February.
Emefiele also said on a conference call with analysts that the 7.9 percent inflation rate recorded at the end of April was a “good level,” although he added the central bank would work to bring down interest rates eventually.
Investors and analysts, worried by the suspension of widely respected former governor Lamido Sanusi, have fretted that the government may attempt to influence monetary policy ahead of a national election next year in Africa’s largest economy.
Sanusi, an outspoken critic of the government who regularly railed against its record on corruption, was a favourite of international investors. He was named the Emir of Kano on Sunday, making him one of the most influential leaders in the largely Muslim north of Nigeria.
“The MPC is very independent and there would not be any changes (to policy),” Emefiele said, referring to the bank’s monetary policy committee.
“All decisions will be taken in line with economic fundamentals.”
Africa’s top oil producer has sustained inflation at single-digits over the past 15 months, owing to tight monetary policy, Emefiele said, noting that the bank would work to maintain that.
He said he wanted to reduce interest rates, stuck at 12 percent since 2011, gradually over the medium term and would work with the government to rebuild the country’s foreign reserves. He added that he saw no need to devalue the currency at the moment.
Asked about the risk of capital flight, which creates pressure for a devaluation, he said: “We have an idea of how much is involved in these flows and I can assure you that with the reserves we have, we are adequately prepared to meet those level of inflows and still maintain price stability.”
Nigeria has around $37 billion in reserves as at June 9, which can cover up to eight months of imports, Emefiele said.
He said the bank would ensure financial stability and and not introduce regulations that would harm the profitability of lenders, referring to a hike in cash reserve ratio that crimped bank interest margins.

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