$10b ‘hot money’ no threat to economy

Nigeria’s financial system is not under threat from speculative investments valued at about $10 billion, the Governor of the Central Bank of Nigeria (CBN), LamidoSanusiLamido, has said.

He said Nigeria would still have $36 billion in reserves if the investments left the country.

Sanusi who spoke yesterday at a conference in Abuja, said the high interest rates have kept inflation below forecast, stabilised the naira and helped raise foreign currency reserves,

“The policy is working” in providing price stability, the core mandate of the bank, he said.

The Monetary Policy Committee, led by Sanusi, has left its policy rate unchanged at a record 12 percent this year to help support the naira and curb inflation. Inflation rose to 11.7 per cent in October, staying below the apex bank’s forecast of as much as 15 per cent after the government cut a subsidy on gasoline in January.

There’s no evidence that lower interest rates will spur economic growth, as the biggest obstacles to borrowing and credit are lack of power supply, roads and other infrastructure that the private sector needs, he added.