Nigeria’s central bank doesn’t see the price of oil falling below $80 a barrel this year and expects to keep monetary policy tight until inflation returns toward its target, Governor Godwin Emefiele said.
So long as U.S. sanctions take effect on Iran in November, “I do not expect the price to close less than $80 this year,’’ Emefiele told reporters in London on Sunday.
Nigeria is Africa’s biggest oil producer. Brent for December settlement declined 42 cents on Friday to $84.16 on the London-based ICE Futures Europe exchange.
The central bank has held interest rates at a record high 14 percent since 2016 to fight inflation that has breached its target band of 6 percent to 9 percent for more than three years and quickened in August for the first time in 19 months.
“The current state of tightening will continue until at least we see inflation attaining those levels that have been set” as a target, Emefiele said.
He also said Nigeria would continue to intervene to support its exchange rate, although he noted the pressure on the bank and the country’s currency reserves had been less than those on other emerging markets.
“We will continue to intervene,’’ he said. “We believe in a stable exchange rate regime.’’
Authored By: Simon Kennedy