The Monetary Policy Committee retained the policy rate at 12 percent, for the 11th consecutive meeting in order to protect the Nigerian economy against the adverse effect of increased oil theft on government earnings and increased borrowing.
Speaking at the meeting which held Tuesday in Abuja, CBN governor, Sanusi stated, “Principal risks remain, largely due to the loose fiscal stance and rising deficit, excess liquidity in the banking system and risks to the exchange rate due to a combination of revenue shocks and external developments.”
He added, “The committee expressed strong concerns about the risks posed to government revenues from oil theft.”
The Nigerian currency has fallen 3.5% against the dollar this year, according to information retrieved from Bloomberg.
“The exchange rate is the focus,” Alan Cameron, an economist at FCMB Group Plc in London, said in a phone interview today. “Inflation they’re pretty sure is going to go down and they’re worried about fiscal policy in the context of what it could do to the exchange rate.”
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