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UPDATE 1 -Nigerian central bank says leadership change won't alter policy
February 21, 2014 / 5:35 PM / 4 years ago

UPDATE 1 -Nigerian central bank says leadership change won't alter policy

By Camillus Eboh

ABUJA, Feb 21 (Reuters) - A change of leadership at Nigeria’s central bank will not affect the direction of monetary policy, and the bank has no immediate plans to devalue the naira , Acting Governor Sarah Alade said on Friday.

“The bank has the capacity to meet the demands of all foreign exchange users,” she said, adding that the regulator would continue to pursue “the principal goal of ensuring monetary and price stability ... measures consistent with sustainable, non-inflationary growth.”

Markets have been a tailspin since President Goodluck Jonathan suspended Central Bank Governor Lamido Sanusi on Thursday, on allegations he mismanaged the bank’s budget, especially its procurement procedures.

Sanusi was credited with stabilising the exchange rate of the naira, the local currency, and bringing down inflation.

The naira fell to a record low 169 to the dollar on the news before trading ground to halt because of excessive volatility. The bank has since intervened twice with dollar sales to prop it up -- $150 million was spent on Thursday, dealers said. No figures were available for Friday.

The central bank says it still wants to keep the naira within its managed target band of 150-160 to the greenback.

But even after the two interventions, the currency closed at 165.10 on Friday. It was already under pressure as foreign investors pulled back from emerging markets in general, and the central bank had spent billions of dollars defending it.

Figures on the bank’s web site show liquid reserves had declined by $2.21 billion or 5.2 percent this year to $40.25 billion by Feb. 19, from $42.46 billion at the start of the year. That is about $45 million a day.

“Recent changes at the CBN will not in any way affect the monetary policy direction and pursuit of ... maintaining price and financial system stability,” Alade said.

Sanusi, whose term was due to end in June, had been presenting evidence to parliament that he said showed the state oil company, Nigeria National Petroleum Corporation (NNPC), failed to remit $20 billion it owed to federal government coffers, fuelling suspicion his suspension was politically motivated. The presidency denies that.

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