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Monday, June 10, 2013

Monetary policy stabilising naira– Okonjo-Iweala

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Monetary policy stabilising naira– Okonjo-Iweala
Jun 10th 2013, 23:00

The Minister of Finance, Dr. Ngozi Okonjo-Iweala on Monday took a new position on the monetary policy, saying that the monetary policy pursued by the Central Bank of Nigeria had helped to stabilise the exchange rate and curb inflation.

Okonjo-Iweala had said prior to last month's Monetary Policy Committee meeting that the economy would benefit from interest rate easing.

Reuters, however, quoted Iweala as saying in Abuja on Monday that an increase in foreign-currency reserves was acting as a buffer for the currency.

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

The MPC, led by the CBN Governor, Mr. Lamido Sanusi, has kept its benchmark interest rate unchanged at a record high of 12 per cent since October 2011 to bolster the naira.

Reserves increased 28 per cent to $48.4bn in the year through June 6, according to data from the CBN. The inflation rate reached 9.1 per cent in April, meeting the CBN's target of less than 10 per cent for the fourth consecutive month.

"Nigeria needs annual economic growth of 13 per cent in order for us to solve the unemployment and other problems that we have by the year 2020," Okonjo-Iweala said.

The economy is, however, forecast by the government to expand by 6.5 per cent this year.

The naira has weakened by 1.8 per cent against the dollar this year to N159 at the inter-bank market in Lagos.

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