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Nigerian External Reserve Hits 43.48bnNigerian External Reserve Hits 43.48bn
Vanguard
8 June 2007
The Monetary Policy Committee (MPC) of the CBN said in Abuja, that the country's external reserve had risen to $43.48bn as at May this year. The reserve stood at $41.96bn in December last year.
The Governor of CBN, Prof. Charles Soludo, said, at a news briefing, that the growth in the nation's external reserve could finance 25 months of imports. Soludo, who spoke on behalf of the committee, however, noted the risk to the growth of reserve arising from the decline in the volume of crude oil production due to disturbances in the Niger Delta.
Soludo said that the inflation rate stayed within a single digit in the first four months of 2007 with a steady drop from 8.5 per cent in December 2006, to 4.2 per cent in April 2007.
He said the committee observed that the current estimate showed that inflation would remain at a single-digit at the end of the second quarter, in spite of the persistence of inflation pressure.
Soludo said that the broad money grew by 8.80 per cent and moderated to 7.70 per cent at the end of the first quarter of 2007. He said that the growth in broad money was attributed to the combined effects of the increase in foreign asset of the banking system and credit to the private sector.
He said that aggregate domestic credit had recorded a decline of 63.7 per cent at the end of March and 38.7 per cent in April 2007, relative to its level at the end of December 2006.
The fall in aggregate credit, according to him, was attributed to the decline in credit to government during the period. Meanwhile, credit to the private sector recorded a growth of 24.7 per cent in the first quarter of 2007, reflecting a growth of 72.0 per cent on annualised basis, while the target for the year was 30 per cent.
Soludo said that a significant proportion of the credit went into import financing which had low inflation risk for domestic economy. According to him, the spending items include payment for telecommunications and information technology imports and the payment for oil blocs in foreign currencies.
On exchange rate, Soludo noted with satisfaction the continued stability of the Naira in the first five months of 2007 and the impact of the stability on the economy generally, particularly in locking-in inflationary expectations.
Copyright © 2007 Vanguard
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