Nigeria May Tighten Policy If Oil Price Raised, Sanusi Says

Nigeria’s central bank may raise interest rates if lawmakers agree to increase the budgeted oil price to $75, fueling inflation, Governor Lamido Sanusi said.

“If the National Assembly does that, which we think is inadvisable, then we would have to look at an even tighter situation because we’ve got to respond to protect price stability” Sanusi said in an interview in Davos today.

Nigeria, Africa’s largest oil producer, will be dealing with a “number of inflationary threats” this year, the governor said. A reduction in the fuel subsidy will have a “short-term” impact on inflation and higher government spending is a “major, major concern” for the central bank, Sanusi said.

The Central Bank of Nigeria has continued to increase its holdings of yuan, mainly in cash and deposits, he said.

To contact the reporter on this story: Alaa Shahine in Davos, Switzerland at asalha@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net

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