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Sanusi Assures of No Naira Devaluation

While the bank continues to seek a stable Naira exchange rate for as long as its foreign exchange reserves can support it, there is no plan at the moment to devalue the naira, Lamido Sanusi has said.

The Governor of the Central Bank of Nigeria (CBN), who spoke on the sidelines of the ongoing World Economic Forum in Davos, Switzerland, said such would “not affect the current account balance, given the highly inelastic nature of our imports and the dominance of oil”.

He, however, re-echoed the warning by Finance Minister and Coordinating Minister for the economy, that Nigeria’s oil savings were rapidly running out.

“My strong view is that a stable currency is absolutely critical for price stability and financial stability in general,” he told the Reuters Global Markets Forum, an internet chatroom, in Davos.

He said Nigeria’s oil savings in the Excess Crude Account (ECA) had now fallen to just $2.5 billion, compared with $11.5 billion a year ago, and that until they were replenished there would little room for a policy rate cut below the current 12 percent benchmark.

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