Sanusi Vows to Maintain Single-digit Inflation at CBN


lamido-sanusiThe Central Bank of Nigeria (CBN) has said it will continue to implement policies that will ensure the Consumer Price Index (CPI), which used to measure the level of inflation in the country remains within the single-digit band.

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The CBN Governor, Mallam Sanusi Lamido Sanusi, said this during an interview with journalists in Lagos at the weekend.

The National Bureau of Statistics (NBS) is expected to release the October inflation numbers on November 18, 2013. The consensus is that headline inflation will continue its downward trend in the last quarter of the year. The CPI for September was eight per cent, the lowest level since March 2008.

But Sanusi disclosed that in 2014, the central bank would ensure that inflation remains within the band of six to nine per cent.

“As you know, we have to continue working to keep it around our target. Inflation is not static. Nine per cent is where it is today, but we have to make sure we keep it at sub-nine,” the CBN governor added.

According to him, the CBN had set a floor of six per cent. Furthermore, he predicted that in the medium- term, the country could achieve inflation within the region of four to five per cent.

“Six per cent is the floor because there are very huge adjustment costs if you try to move too quickly to very low inflation target. But we can do that gradually and this is the beginning of the process.
“In the medium- term, we should be able to move Nigeria into a proper lower inflation environment and a region of four to five per cent,” he declared.

Meanwhile, a Lagos-based financial advisory firm, Financial Derivatives Company Limited (FDC) has forecast a further decline in the headline inflation for the third consecutive month in October to 7.79 per cent.

A report from the firm also argued that given the expected decline in inflation for October and the rest of 2013, the Monetary Policy Committee (MPC) would have more room to concentrate on achieving its other policy objectives of currency stability and economic growth.

It however added: “All indications are that the MPC will maintain its current monetary policy stance at its November meeting. However, there is a slight possibility of an increase in the cash reserve requirement (CRR) on all public sector deposits from 50 per cent to 75 per cent.

“The consensus however, supports maintaining the status quo while the following are factors that would influence the outcome of the meeting: treat of fiscal overdrive; banking system liquidity and high powered money and currency weakness.


Babatunde Akinsola
Babatunde Akinsola
Babatunde Akinsola is aNaija247news' Southwest editor. He's based in Lagos and writes on the Yoruba Nation political issues, news and investigative reports

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