NIGERIA’S CBN WARNS AGAINST DEREGULATION

LAMIDO SANUSI.

COUNTRY’S 3Q GDP UP AT 7.58

Abuja (THEWILL) - The Central Bank of Nigeria has warned against the planned deregulation of the prices of petroleum products because of the risk of inflation now and in the near future.

Governor Lamido Sanusi in a note after a monetary policy committee meeting, expressed the regulator’s dilemma on the planned deregulation taking into consideration the successes recorded thus far in managing inflation.

Nigeria’s inflation rate index was significantly down to 10.4% for September 2009 as against 12.6% recorded in the first 9 months of the year. GDP for the 3^rd quarter grew to 7.58% from 7.22 in the 2^nd quarter.

The Bank’s outlook for the economy is optimistic as it expects economic growth to remain robust because of current positive indicators.   

The country’s foreign reserve was up at 43.34 billion US dollars; recording an improvement of about $1.64 billion largely due to the SDR allocation it received.

Other decisions reached according to Sanusi, include maintaining the current monetary policy rate (MPR) of 6%, setting up an Asset management Company (AMC) and lifting the temporary ban on use of Bankers’ Acceptance and Commercial Papers by November 16, 2009.

The Bank is also waiving the 1 per cent general provision on performing loans contained in the existing prudential guidelines for 2009 as a countercyclical measure.

“ The totality of these measures is aimed at improving system liquidity and financial stability to generate confidence in the Nigerian markets and to further stimulate growth,” he concluded.