NIGERIA’s central bank governor said yesterday he saw no reason to raise interest rates in sub-Saharan Africa’s second-biggest economy, days before a monetary policy committee meeting.
Governor Sanusi Lamido Sanusi also said four international banks were among the likely bidders for banks rescued last year in a billion-dollar bail-out, and that he expected bids by the end of the month. Nigeria’s benchmark interest rate has been on hold at 6% for a year, despite double-digit inflation as the central bank strives to stimulate growth in the wake of last year’s banking crisis.





“We see no compelling reason to raise rates,” Mr Sanusi said on the sidelines of the Investing in Emerging and Developing Markets conference at Chatham House in London.
The country’s monetary policy committee meets on Monday and Tuesday. It warned in May that an expansionary budget and the soaking up of bad bank loans could pose an inflationary risk later in the year.
Mr Sanusi described headline inflation at about 11% in May as “relatively stable”.
Higher government spending and the purchase of nonperforming bank loans by a planned asset management company could translate into a higher inflation risk, Mr Sanusi said in May
We expect (the bank bids) by the end of July from local banks, foreign banks and private equity firms,” Mr Sanusi said. “The bulk of them are local, there are four international banks.”
He said the results of the bids would be released by September or October. Nigeria’s central bank planned to clear about 10bn of toxic debts from the banking system by the end of the year as it tried to revive lending and boost growth, he said. The debt purchases would cost the bank “roughly” 5bn as commercial banks did not have collateral to cover the bad loans, he said.