Sanusi lauds FG’s fiscal prudence, as inflation crashes to a 5-year low •Cautions against increased spending in 2014

Posted by News Express | 25 November 2013 | 3,001 times

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Central Bank of Nigeria (CBN) Governor, Mr. Sanusi Lamido Sanusi, has commended what he described as the prudent fiscal spending of the Federal Government this year.

Speaking on Bloomberg TV at the weekend in Abuja, Mr. Sanusi noted that Federal Government’s overall spending in 2013 has not been significantly higher than it was in 2012 due to tight controls in spending in the second half of this year. This situation, he stressed, has aided in moderating the rate of inflation in the country, bringing it down to a five-year low. He said that with the trend it is hoped that the stability anchored on key macroeconomic indicators like inflation, exchange and interest rates, would be sustained.

The CBN Governor, however, advised caution in future spending owing to the decline in oil revenue despite the relative stability in oil price and output when compared with preceding years.

While expressing concern over the challenge of loss of revenue from oil exports, Mr. Sanusi advised the financial authorities to block fiscal leakages in the oil sector and increase oil revenues.

In anticipation of public spending ahead of the 2015 General elections in the country, the CBN Governor noted that politicians the world over tend to spend money in election years, and he did not rule out the possibility of a supplementary budget. Although the 2014 budget as proposed to the National Assembly is prudent, a supplementary budget would portend a risk to hard-earned stability, he said.

Sanusi however assured that the CBN is ready to use its monetary policy tools to respond appropriately and ensure that the Naira remains stable, even as inflation is kept under control.

News Express recalls that the Monetary Policy Committee (MPC) of the CBN at its last meeting voted to keep MPR at 12% +/- 2%; private sector CRR at 12%; public sector CRR at 50% and Liquidity Ratio at 30%.

•Photo shows CBN Governor Sanusi.

Source: News Express

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