* Sanusi says inflation less of a worry
* Bank held rates for 7th time at last MPC meeting
* Governor concerned about global slowdown, oil price
(Adds details, background, quotes)
By Tim Cocks
ABUJA, Dec 5 Nigeria's central bank governor
said on Wednesday that monetary tightening earlier in the year
had largely achieved its objectives of stabilising the naira and
taming inflation, which were less of a worry than four months
Lamido Sanusi, who spoke to Reuters on the sidelines of the
Nigeria Economic Summit in Abuja, also reiterated his concern
that oil prices could fall due to global economic uncertainty,
posing risk for Nigeria, one of the world's 10 biggest oil
The Nigerian central bank kept interest rates on hold at 12
percent at its last Monetary Policy Committee meeting on Nov.
20, for the seventh time in a row. Sanusi at the time cited the
need to tread a fine line between concerns over food inflation
and threats to Nigeria's growth from global economic weakness.
Yet his comments during the meeting were seen by analysts as
unusually dovish on inflation, leading some speculate that
loosening could be in the pipeline in the near future.
"It's clear the objectives we set for ourselves when we
tightened have been largely achieved," Sanusi told Reuters on
Wednesday. "We've stabilised the exchange rate and we've stopped
inflation from spiking. Core inflation has come down for the
fourth consecutive month."
Nigeria's naira currency had been under pressure
earlier this year, but central bank intervention at the end of
June has seen it gradually appreciate since.
Analysts expect the current 12 percent base interest rate to
be maintained until at least March next year, after which it may
come down a bit, if inflation continues to stabilise, they say.
"There are underlying widespread pressures on imported food
inflation ... But in terms of where we were 4-5 months ago, the
concerns are more muted," Sanusi said, declining to comment on
whether that means rates could soon come down.
"(At the last MPC meeting) We really didn't think it was
time yet to start loosening, which is not to say we will not
loosen," Sanusi said.
Nigeria, Africa's second-biggest economy, grew 6.5 percent
in the third quarter from a year earlier, up slightly on the
previous quarter but below last year's levels. Sanusi is
concerned about the economic impact of an oil price shock.
"The major concerns are around the external environment:
what's happening in America, what's happening in Europe and what
will happen to commodity prices as a result," he said.
He added that the accumulation of foreign exchange reserves
- they are currently at a more than three-year high - would help
cushion Nigeria against a possible oil price shock.
But he remained concerned about the government spending too
much of its oil windfall, especially with the legislature trying
to inflate the benchmark oil price above the administration's
proposed $75 a barrel, which would mean saving less.
Oil revenues above the benchmark are deposited into a
savings account, so the higher it is, the less is saved.
"I don't think it is appropriate for the legislature to be
increasing the benchmark price," he said.
(Editing by Michael Roddy and Susan Fenton)