With inflation continuing on its downward trend, the governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, has disclosed that the apex bank could start cutting interest rates in the first half of the year.
Inflation, which had risen to almost 19 per cent last year January, had maintained a steady decline standing at 15.37 in December 2017 despite fuel scarcity during the yuletide.
Emefiele also said with continuous increases in the price and shipment of oil, Nigeria’s biggest foreign-currency earner, and improved investor confidence, the CBN can build its reserves to $60 billion in the next 12 to 18 months, from the current $40 billion.
Speaking in an interview with Bloomberg in his office in Abuja, yesterday, the CBN governor said once inflation gets to low double digits “and high single digit happens, then it should be easy for MPC to begin to look at easing.
He said, “I want to think that between the end of the first and second quarter, we should begin to see easing. Nigeria’s inflation slowed to a 20-month low of 15.4 per cent in December. The Monetary Policy Committee didn’t meet as scheduled this week and the central bank’s key rate remained at 14 per cent where it has been since July 2016. The MPC has been trying to balance bringing down inflation and boosting an economy that contracted in 2016.
“Inflation is treading downwards, but a little bit sticky downwards. We believe that the rate of moderation will improve in the coming months”.
Emefiele said the apex bank is engaging with the National Assembly and that he is optimistic that the new members of the MPC, including a deputy governor, will eventually be confirmed.
He said increases in the price and shipment of oil, Nigeria’s biggest foreign-currency earner, and improved investor confidence mean the central bank can build its reserves to $60 billion in the next 12 to 18 months, from $40 billion currently.
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