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CBN’ll sustain tight monetary policy – Nnanna

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Stanley Opara with agency report

The Central Bank of Nigeria will keep the monetary policy tight as dollar shortages persist, the deputy governor of the bank, Joseph Nnanna, said before an interest rate announcement next week.

Now is not the time to ease policy, he said in an interview with Bloomberg in Abuja. Inflation slowed for a third month in April, but at 17.2 per cent remains almost double the upper limit of the bank’s six per cent to nine per cent target.

“We are battling with liquidity as it were, so tight monetary policy will be for now,” he added.

 The Monetary Policy Committee, of which Nnanna is a member, is scheduled to announce its decision on May 23. All but one of 21 economists surveyed by Bloomberg predict it will keep the main rate at a record high of 14 per cent, a level it’s been at since July.

The head of Africa macro research at Standard Chartered Plc, Razia Khan, forecasts a cut of 100 basis points.

Nnanna said he would probably replace Sarah Alade as head of economic policy at the central bank, a role that’s key to wooing back foreign investors and helping the nation alleviate its dollar-squeeze.

Alade retired in March and was the best-known of Nigeria’s four deputy governors among global bond and stock investors, often accompanying Governor Godwin Emefiele on roadshows. Nnanna is currently in charge of financial system stability and has overseen the economic policy brief since Alade’s departure.

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