Nigerian Monetary Policy Stabilizing Naira: Okonjo-Iweala

Nigeria’s “good monetary policy” has helped to stabilize the exchange rate and curb inflation in Africa’s biggest oil producer, Finance Minister Ngozi Okonjo-Iweala said.

An increase in foreign-currency reserves is acting as a buffer for the currency, Okonjo-Iweala said today at a conference in Abuja, the capital.

“Reserves are what’s going to help to make the exchange rate stable,” she said. “When your reserves are going down, that’s when you experience instability and people can come and attack your currency.”

The Monetary Policy Committee, led by Governor Lamido Sanusi, has kept its benchmark interest rate unchanged at a record high of 12 percent since October 2011 to bolster the naira. Reserves increased 28 percent to $48.4 billion in the year through June 6, according to data from the central bank. The inflation rate reached 9.1 percent in April, meeting the central bank’s target of less than 10 percent for the fourth consecutive month.

Nigeria needs annual economic growth of 13 percent “in order for us to solve the unemployment and other problems that we have” by the year 2020, Okonjo-Iweala said. The economy is forecast by the government to expand 6.5 percent this year.

The minister had said on May 20 the nation needs lower interest rates to help boost investment and economic growth.

The naira has weakened 1.8 percent against the dollar this year to 159 as of 3:32 p.m. in the interbank market in Lagos, the commercial capital.

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