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CBN remains very independent – Emefiele

By on June 13, 2014

The Central Bank of Nigeria (CBN) Governor, Mr. Godwin Emefiele, yesterday said the central bank remains “very independent,” dismissing fears of government interference after the president ousted the previous governor in February.

Reuters quoted Emefiele to have 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 former CBN governor, Sanusi Lamido Sanusi had fretted that the government may attempt to influence monetary policy ahead of the 2015 elections in Africa’s largest economy.

“The Monetary Policy Committee (MPC) is very independent and there would not be any changes (to policy),” Emefiele said.

“All decisions will be taken in line with economic fundamentals.”

Africa’s top oil producer has sustained inflation at single-digit 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 per cent since 2011, gradually over the medium term and would work with the government to rebuild the country’s foreign reserves.

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 had 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 not introduce regulations that would harm the profitability of lenders, referring to a hike in cash reserve ratio that crimped bank interest margins.
He added that he saw no need to devalue the currency at the moment.

 

 

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