Central Bank of Nigeria Communiqué No. 81 of the Monetary Policy
Committee Meeting of Monday and Tuesday, January 30 and 31,

The Monetary Policy Committee (MPC) met on January 30 and 31,
2012 with all 12 members in attendance to review the domestic
economy in 2011 and the nature of current challenges against the
background of developments in the international economic and
financial environments.

At the outset, the Committee recalled that in a bid to ensure price
and financial stability, the Committee, held six (6) regular meetings
and one (1) extra-ordinary meeting in 2011 during which it raised the
Monetary Policy Rate (MPR) six (6) times, from 6.25 to 12.0 per cent;
raised the Cash Reserve Requirement (CRR) three (3) times from 1.0
to 8.0 per cent; and the liquidity ratio (LR) once from 25.0 to 30.0 per
cent. It also reduced the foreign exchange net open position of
DMBs from 5.0 to 3.0 per cent, and adjusted the mid-point of the
exchange rate band from N150/US$1 to N155/US$1. These decisions
signalled to the market the Committee‟s clear and unambiguous
commitment to the primacy of price stability as its key mandate.

The Global Economy
Latest projections by the International Monetary Fund (IMF)
indicated that global output growth which had slackened from 5.2

per cent in 2010 to 3.8 per cent in 2011 could decelerate further to
3.3 per cent in 2012. Advanced economies are expected to record
a lower rate of growth of 1.2 per cent in 2012 compared to the
estimated 1.6 per cent in 2011. The US economic growth in the
coming quarters would depend a great deal on growth of the Euro
area. The Euro area is projected to record a negative growth of 0.5
per cent in 2012 essentially on account of the burden of high public
debt and the fragility of the credit and financial markets. Output
growth in emerging and developing economies slowed down in
2011. China, India and Brazil all posted lower growth rates in 2011
than in 2010. Sub-Saharan Africa has been a major exception to the
global trend: it is estimated to have grown by 4.9 per cent in 2011
and is expected to record a higher growth of 5.5 per cent in 2012.

Inflation rates in most of the advanced economies trended upward
in 2011 with the exception of Japan. In the US, UK, and Germany,
inflation rose from 1.4, 3.7, and 1.7 per cent in 2010 to 3.0, 4.2, and
2.1 per cent in 2011, respectively. The Euro-zone debt crisis worsened;
leading to credit ratings downgrades, change of governments, and
implementation of austerity measures, even as a few nations
appeared to have entered into a recession.

The Committee felt that in the light of the expected deceleration in
the economies of the country‟s major trading partners, and the

absence of adequate commitment of most advanced economies
to effectively address the fiscal imbalances and to reform their
financial systems, there would be continued pressure on Nigeria‟s
external sector in 2012. The anticipated slack in external demand
would, in the view of the Committee, have to be offset by
generating the needed domestic demand. This, however, would
require a shift in the economic development strategy that allows
greater diversification of the economy without losing sight of the
need to pursue sound demand management policies.

Key Domestic Macroeconomic and Financial Developments

Output and Prices

Provisional data from the National Bureau of Statistics (NBS)
indicated that real Gross Domestic Product (GDP) grew by 8.68 per
cent in the fourth quarter of 2011 up from 6.64, 7.72, and 7.40 per
cent in the 1st, 2nd and 3rd quarters, respectively. The overall GDP
growth rate in 2011 was estimated by the NBS at 7.69 per cent,
marginally lower than the 7.87 per cent recorded in 2010. This
projection is based on the estimated Quarter III and Quarter IV
growth rate of 7.40 per cent and 8.68 per cent respectively. The
2012 Budget proposal assumed a growth rate of 7.2 per cent. This is
in line with the latest World Bank forecast of 7.1 per cent growth for
Nigeria in 2012. The Committee noted with satisfaction, the good

performance of non-oil activities including agricultural and services
sectors as well as the recovery in crude oil output in 2011, particularly
in the fourth quarter. In the Committee‟s view, the opportunity to
build on the robust non-oil growth with further investments in
infrastructure and manufacturing and processing activities should be
utilized in order to mitigate any negative impacts from the likely
external shocks during the year.

The Committee also noted the NBS survey data on the rise in the
unemployment rate to 23.9 per cent in 2011 from 21.4 per cent in
2010. The latest unemployment rate is considerably higher than the
12.3 per cent recorded in 2006 by the NBS survey, which suggests
that the consistently high output growth during this period had failed
to create adequate employment for the growing labour force.

In view of this, the Committee recommends that in addition to the
structural reforms being currently pursued, emphasis should be
placed on technical and vocational education in order to produce
a labour force that is compatible with the current stage of the
country‟s development.

In 2011, the Inflation rate fluctuated within the lower double-digits
range during the early part of the year, but moderated thereafter.
The year-on-year headline inflation rate, which was 12.1 per cent in

January 2011 rose to 12.8 per cent in March, before moderating to
10.2, 10.3, and 10.3 per cent in June, September, and December,
respectively. Similarly, food inflation rose from 10.3 per cent in
January 2011 to 12.2 per cent in March and thereafter moderated to
9.2, 9.5, and 11.0 per cent in, June, September, and December,
respectively. Core inflation also rose from 12.1 per cent in January
to 12.8 per cent in March stabilizing at 11.5, 11.6, and 10.8 per cent in
June, September and December, respectively.

The headline inflation rate stood at 10.3 per cent in December 2011,
by far the lowest since December 2008 and lower than the average
of 12.75 per cent during the period 2001-11. Food inflation, at 11.0
per cent in December 2011, was lower than its level in the preceding
three years. Similarly, the year-on-year core inflation declined in
2011. At 10.8 per cent in December 2011, core inflation was
marginally lower than the 10.9 per cent in December 2010 and 11.2
per cent in December 2009. The Committee noted that both food
and core inflation have remained high exerting immense pressure on
the headline inflation rate. The Committee was therefore of the view
that while the focus on growth continues to be a key imperative, the
containment of inflation equally deserves immediate attention. It
noted that the inflation outlook in the short- term will be impacted by
the anticipated fiscal injections in relation to the proposed 2012
budget, the recent partial deregulation of pump price of PMS, and

new tariff regimes on certain food imports. The Committee has also
noted comments indicating possible plans by the National Assembly
to revise the budget benchmark price of oil from $ 70 per barrel to
$75 or even $80 per barrel. Such a measure would significantly
increase expenditures especially given the already high oil output
assumptions. In addition, it would reduce accretion to the Excess
Crude Account (ECA) and increase the inflationary pressure already
in place on the supply-side. In the event of this happening, the
likelihood of further tightening during 2012 increases. The Committee
would like to reaffirm its commitment to price and exchange rate
stability and its determination not to pursue an accommodative
policy stance. The Committee therefore, strongly supports the
recommendations of the Executive for a benchmark price of a
maximum of $70 per barrel.

Monetary, Credit and Financial Market Developments
Broad money supply (M2) growth was sluggish up to May, 2011,
accelerated thereafter to 5.66, 9.50 and 15.40 per cent in June,
September, and December 2011, respectively. When annualised, M2
grew by 11.32, 12.67, and 15.40 per cent in June, September and
December, respectively, which hovered around the indicative
growth benchmark of 13.75 per cent for 2011. Thus, M2 growth of
15.4 per cent in 2011 was higher than the 6.9 per cent growth in
2010. The significant increase in credit to the private sector as result

of loan to AMCON to finance its activities was a major factor
underlying growth in monetary aggregates in 2011.

The Committee noted that money market rates moved upward in
2011. The average OBB rate increased to 15.50 per cent in
December from 6.22, per cent in January. Similarly, the average
call rate rose to 14.09 per cent in December from 6.42, per cent in
January. The rise in money market rates should be viewed in the
overall context of monetary tightening stance of the Bank in 2011
through hikes in the monetary policy rate (MPR) as well as the sharp
increase in the cash reserve ratio (CRR) from 4 per cent in
September to 8 per cent in October. The Committee observed that
monetary tightening was also used to restore stability in the foreign
exchange market. In January 2012, money market rates have been
hovering within a range of 12.85-15.70 per cent. Long term bond
yields have tended to move in the range of 14-15 per cent.

Responding positively to the hike in policy rates, both the lending
and deposits rates of deposit money banks also moved up in 2011,
although substantially less in the case of the latter. The maximum
lending rate increased to 23.21 per cent in December from 21.75,
22.02, 22.02 and 22.09 per cent in January, March, June and
September, respectively. Also, the prime lending rate rose to 16.75
per cent in December from 15.73, 15.81, 15.76 and 15.87 per cent in

January, March, June and September, respectively. The spread
between the maximum lending rate and the average deposit rate
which was at 19.22 percentage points in June moved up to 20.12
percentage points in December.

External Sector Developments
Foreign exchange reserves amounted to US$ 32.64 billion as at end
December 2011, more or less flat relative to the US$32.34 billion as at
end December 2010, despite the higher oil price in 2011.
Notwithstanding the high prices of Nigeria‟s reference crude oil
(Bonny Light) which averaged US$106.32 per barrel for the year, the
limited accretion to external reserves was due to the high demand
for foreign exchange in the market. The Committee noted that
pressure on the exchange rate emanating from the high demand
reflected the import-dependent nature of the economy, probably
compounded by the activities of speculators. The reduction in
arbitrage opportunities in the oil marketing sectors combined with
stronger controls in foreign exchange practices have already led to
a noticeable moderation in foreign exchange net demand.

The official wDAS rate (inclusive of 1 per cent commission) moved up
from N151.62 per US$1 in January 2011 to N154.45/US$1 in June and
further to N158.21/US$1 in December 2011. The volatility in the official
rates, however, was limited with the coefficient of variation being

1.28 per cent for the year as a whole compared to 0.32 per cent in
2010. The Committee commended the CBN for its efforts at
establishing stability in the market. It also urged the CBN to strive to
eliminate speculative demand for foreign exchange.
The
Committee also noted that as at January 24, 2012, the exchange
rate was N158.57/US$1, while the foreign exchange reserves
amounted to $34.18 billion on January 27, 2012, which could finance
over 6 months of imports of goods and services. The outlook for oil
prices in the short-term as well as the forecast demand/supply
balance, suggest that the current exchange rate band should be
retained while still achieving moderate continuous accretion to
reserves

The Committee’s Considerations
The Committee is pleased that ahead of most African countries,
Nigeria had been proactive by responding to the threats of inflation
induced by fiscal spending and global food, fuel and other
commodity prices as well as to the challenges of financial stability.
The Committee observed that the mandate of the Bank was largely
achieved, as inflation was contained within tolerable levels and the
exchange rate was generally stable throughout 2011. The resolution
of the banking crisis during the year was also commended. Against
this background, the Committee welcomed the stated fiscal stance
of the Federal Government as part of its programmed movement

towards fiscal consolidation. The increased share of capital
expenditure in the proposed total expenditure in 2012 is an
important signal of the commitment of the Federal Government to
improve the productive capacity of the economy. The Committee
finds the current environment to be conducive for improved cooperation
and
coordination
between
fiscal
and
monetary
authorities.

The Committee acknowledged that the decision to remove the fuel
subsidy was a major development that took place since its last
meeting in November 2011. It commended the Federal Government
on the partial removal of subsidy on Premium Motor Spirit (PMS),
which it noted will have salutary effects on the external reserves and
exchange rate as well as on investment in oil and gas downstream
sector. It further commended the Federal Government for the
commitment towards the passage of the Petroleum Industry Bill (PIB)
which, it believes, would further complement the benefits of the fuel
subsidy removal. On the other hand, it recognized the possible
negative impact of the partial removal of fuel subsidy on the general
price level and hence inflation in the short run. In this regard, it
underscored the need for the speedy implementation of the
palliative measures and entrenchment of social safety nets for the
more vulnerable groups. However, the long-term benefits far
outweigh the likely short term costs as far as inflation is concerned.

Furthermore, the Committee commended the fiscal authorities for
the benchmark crude oil price of $70 per barrel as proposed in the
2012 budget and advocated for its retention as any upward revision
would tend to undermine macroeconomic stability.

The Committee considered the need to sustain the high output
growth that the country has seen in recent years partly because of
the slowdown in the advanced and other emerging economies and
partly because of the need to generate employment in the
economy. However, to help generate new jobs, it would be essential
for the Federal Government to move quickly with the structural
reforms such as (a) power sector reforms, (b) implementing the
agricultural sector transformation programmes and the associated
value chain, and (c) refocusing attention to the provision of
technical and vocational training to bring about skills development
that would match the needs of the economy.

The Committee underscored the need for maintaining price stability
in a manner conducive to the achievement of employmentgenerating growth. In this connection, it observed that the
announced increase in import duties on some food items by the end
of June 2012 would exert further pressure on food prices which would
compound the effect of increased transportation costs induced by

the partial removal of the fuel subsidy on the general price level and
the associated inflation expectation.

The Committee noted that historically, upward adjustments in the
price of PMS have tended to have a short-term impact on the rate
of inflation. A review of previous instances of adjustment in fuel
prices shows that without exception, each instance is accompanied
by an increase in the rate of inflation followed almost immediately
by a moderation in the short - to - medium term. Staff estimates
indicate that inflation in the first two quarters of 2012 would range
between 11.0 per cent and 14.5 per cent, and then moderate
steadily towards the single digit zone by late 2013. Real interest rates
are therefore likely to remain positive on a trend basis, even if the
rate of inflation were to rise briefly above the MPR in the second
quarter.

Finally, the Committee recognized the current security challenges
and Government‟s efforts to find a lasting solution through dialogue,
economic measures and enhanced intelligence. It expressed
confidence on the ability of Government to resolve the problem.

Decisions
In the light of the above, and considering the clear impact of
previous tightening on the rate of inflation and exchange rates up to
December 2011, the Committee unanimously decided as follows:
1. Retain MPR at 12.0 per cent with interest rate corridor of +/- 200
basis points;
2. Retain CRR at 8.0 per cent;
3. Retain minimum liquidity Ratio of 30.0 per cent; and
4. Retain the Mid-point of exchange rate at N155/US$1 with a
band of +/-3.0 per cent.


The Committee also resolved to watch closely developments with
respect to the fiscal stance and to respond appropriately if, and
when, the need arises.


Sanusi Lamido Sanusi, CON
Governor
Central Bank of Nigeria

January 31, 2012

PERSONAL STATEMENTS BY MPC MEMBERS:
1.0 ALADE, SARAH
This Committee meeting is the first for the year 2012, and is coming on the back
of a partial fuel subsidy removal and nation-wide labor strike that affected
economic activities for a week in the country. Although economic prospects for
the country remain optimistic, it has many challenges. Headline inflation
moderated to 10.3 in December 2011; however, staff projection for 2012
suggests a temporary spike before trending downwards in 2013. Money market
rates indicate tight liquidity conditions in the market as interbank rates and other
interest rates have trended upwards, posing constraint to private sector growth
and job creation. These developments, coupled with uncertain global
economic environment, calls for a stay of action on policy rate to help address
the growth needs in the economy.

Removal of Oil subsidy will have inflationary impact, albeit temporary. Although
full subsidy removal was not achieved, the partially compromised removal of 50
percent price increase reached between labor and government will have an
inflationary impact on the economy. This increase in petroleum prices will
impact transportation, energy and food prices, leading to temporary
inflationary pressure. However, as consumers result to expenditure switching,
rather than spend more income, the inflationary impact should be short-lived.
Additionally, the staggered nature of the subsidy removal and introduction of
palliative measures such as public transport system by government is expected
to cushion the impact of the higher fuel prices on the poor and help moderate
the inflationary impact. Inflation, which ended 2011 at 10.3 percent, is
expected to increase temporarily in the first few months of the year. Staff
estimate suggest that it will then moderate to single digit by 2013. This is
because, since there are no additional increase in salaries/wages, consumers
will only switch spending towards fuel related expenditure, away from other
extra expenditure items. Although inflation is projected to rise, the preemptive

tightening stance adopted by the Bank in 2011 calls for a pause for now, to
allow for the full effect of the policy.

Fiscal consolidation is enshrined in the 2012 budget and the fiscal authority has
placed greater emphasis on transparency and prudent spending. The 2012
budget proposal of N4,749 trillion, presented to a joint session of the National
Assembly on December 13, 2011 reduced budget deficit to 2.77 percent of GDP
in 2012 down from 3.0 percent recorded in 2011 budget. This is within the
threshold of 3 percent of GDP stipulated in the Fiscal Responsibility Act of 2007.
Crude oil production is expected to reach the budget target of 2.48 bpd, and
price is expected to remain high in international market on the back of
disrupted supply in the Middle East and renewed recovery in the US that saw
2011 fourth quarter GDP grew by 2.8 percent, the highest quarterly growth rate
recorded in more than two years. If the budget is implemented as proposed, the
inflationary pressure coming from fiscal injection will be contained.

Developments in the domestic money market indicate tight monetary
conditions. Money market rates increased in the fourth quarter of 2011, with
maximum lending rate reaching 23 percent by December 2011 from 22.02
percent in June. Similarly, average OBB rate increased from 9.6 percent in June
to 15.5 percent in December 2011. This is as a result of monetary tightening
implemented by CBN in 2011 and further tightening could increase lending cost
to private sector and further constrain economic activities.

Global growth prospect remain fragile and weak. Developments in the global
economy are still of concern as most advanced economies are projected to
show a lower rate of growth in 2012. The latest IMF estimates project growth in
advanced economies to decelerate to 1.2 percent in 2012 from 1.6 percent
recorded in 2011. The Euro-area would be the hardest hit on the back of high

public debt and fragile financial market. The Federal Reserve Bank has
indicated that it will keep key interest rate very low till late 2014, in an effort to
give the growth prospects in the US an extra push and also in an attempt to
shield the US economy from a potentially more severe recession in Europe. The
Euro-zone debt crisis has worsened, leading to crediting rate downgrade in
some countries and recession in others. In such an uncertain global outlook,
tightening will not be a good option.

Based on the above, I will recommend a “no change” in monetary policy rate
and Cash Reserve Requirement (CRR). The combination of weak global
economic environment and domestic challenges calls for prudent monetary
policy stance to help maneuver the uncertain environment.


2.0 BARAU, SULEIMAN
A.
Developments Since the last MPC
A.1
GDP is forecast to grow from 7.40% in Q3 to 8.68% in Q4. The non-oil sector
remained the main driver of GDP growth. Agriculture, Wholesale and
Retail Trade, and Services are expected to contribute 2.28, 2.39 and 2.23
percent, respectively. Overall, GDP growth is forecast at 7.69 percent in
2011.
A.2
Year-on-Year (YOY) Headline Inflation remained stable at 10.3%, though
the Month-on-Month (MoM) measure showed an increase of 1.02%. Yearon-Year (YoY) Core Rate also increased to 10.8%. However, Month-onMonth Inflation rates also increased by 1.9% and 0.4% for Food and Core
measures, respectively.

A.3
Money market rates were largely volatile dictated as usual by
Governments‟ fiscal operations particularly delays associated with the
activities of FAAC recently.
B.
Comments/Context Setting
B.1
Current inflation numbers do support my earlier view that the rather very
proactive policy measures that we have taken in the recent past have
contained the inflation risk that we face, as reflected particularly, by the
Year-on-Year
indicators.
However,
the
Month-on-Month
measures
indicate upside risk to inflation. Inflation upside risk is further compounded
by the recent upward adjustment in the prices of petroleum products
which has indeed translated into similar, and often, more radical
adjustment of the prices of general goods and services.
However, the very comprehensive staff presentation on inflation outlook
using models that trended inflation after successive past adjustments in
the prices of petroleum products, suggests observed initial spike in inflation
rates, and which is usually followed by declines.
The inflation numbers just released did not show significant build in inflation
expectations, except mildly, as indicated by the Month-on-Month
measures. The explanation for this is perhaps the fact that the adjustment
was sudden, with the adjustment actually expected to be effected in
April, 2012.
Having reviewed the above, it is my firm belief that in the context of
effectiveness of the policy measures taken in the recent past, it does
appear compelling to hold and watch trends in the next few weeks in
order to decide whether to actually recommend measures to contain the
upside risk to inflation.

B.2
It is also significant to hold any new policy measure pending the outcome
of the review of the Appropriation Bill currently before the National
Assembly. The provisions in the Bill appear realistic under the
circumstance, with particular reference to the benchmark price for crude
oil sales. Given the structure of our expenditures, with a larger recurrent
component, any attempt by the National Assembly to increase the
benchmark would increase the expansionary nature of the budget, the
proportionate deficit and ultimately increase the associated inflation risk.
This is a risk I recognize but would caution that we watch developments in
this regard. Therefore, in the context of my earlier comment on the
petroleum price adjustment related risk, we should come up with
complementary response package to these combined risks in due course.
B.3
It is commendable that we now have unemployment numbers from the
National Bureau of Statistics. With unemployment rate at 29% and with a
whopping 16 million Nigerians being unemployed, we do not need to go
far to explain the negative commentaries on our state of governance, the
strike in response to petroleum price adjustment by a segment of the
society and the general security challenges that we currently face as a
country.
The unemployment numbers, in my view, conveyed two important
messages. The first is that contrary to general uninformed commentary
that is now perverse, the economy has been creating new jobs, though
dismal, in the last three years. This, therefore, gives me hope. Secondly,
whereas the economy has grown at an average of over 6% since 2006,
trending unemployment growth over the same period showed flat
growth. The hope that I had just referred to, must be supported by an
aggressive incentive plan and structure to make our youth to gravitate
towards vocational and job creating education rather than white collar

type. We can borrow a leaf from the current programme in South Korea
and other countries. This should complement CBN‟s current efforts and
those of related organizations in providing access to finance for Micro,
Small and Medium Enterprises, and the provision of vocational education.
Government through relevant Ministries must elicit necessary policies and
more aggressively put the infrastructure for generating employment.
In other words we are currently challenged as a country to translate
economic growth into job creating and poverty reducing economic
development.
B.4
In light of the foregoing and in the context of my arguments for hold
position during the last MPC, I‟m compelled to also ask for maintenance
of status quo today.
C.
Recommendation for Policy
Maintain the tightening stance;
Keep MPR at 12%;
Keep CRR at 8%; and
Maintain the existing corridor.


3.0 GARBA, ABDUL GANIYU
Decision
I vote for:
I. Holding the MPR at 12%
II. Maintaining the subsisting Corridor for SLF and SDF
III. Holding CRR at 8%

Observations
Since the last MPC Meeting on November 21st, 2011
a. The National Bureau of Statistics (NBS) released inflation figures for
November and December which show that Headline inflation was
10.3% in December and 10.5% in November compared to 10.5% in
October 2011. Indeed, the NBS data from January 2010 indicates
that headline inflation has been trending downwards. While Food
Inflation exhibited its characteristic seasonal trend (rising in
December by 1.4% year on year relative to November), its effects
were moderated by a 0.7% decline in core inflation in December.
The downward trend of headline and core inflation in 2010-2011
supported Staff forecasts that year on year Headline inflation would
fall below 10% by February 2012.
b. The gap between the operating targets (OBB and Call rate)
narrowed from a peak of 5.4% (December 1, 2011) to an average
of 0.65% from December 28th to January 24th 2012. In addition, both
rates have declined from peak levels in early December 2012 to
average 14.0% (call rate) and 13.4% (OBB) in the last month. The
averages of call rate and OBB are within expected target rates
(MPR + 2%). The moderation in rates correlates with expansion in M1
(12.6%) and M2 (10.8%) in late December 2011.
c. The short term interest rates - Prime Lending Rate and Maximum
Lending Rates - averaged 16.8% and 23.3% respectively. The
averages for 2011 were respectively 22.4% and 16%. The interest
rate spread of 6.5% indicates high risks of lending to small and
medium scale businesses and the high rates correlate with declines
in Deposit Money Banks‟ Loans and Advances to the private sector.

The rate in December was -4% which was significantly higher than
the 2011 average of - 0.17%.
d. On the first day of 2012, the economy experienced a strong supply
and demand shock in the form of a sharp increase in the price of
Premium Motor Spirit (PMS) from N65 per liter to N141 per liter on
January 1 2012. Following the crisis that followed, the government
reduced the price to N97 per liter. The shock shifts the Aggregate
Supply to the left. In addition, it shifts the aggregate demand
leftwards, alters relative prices and the general price level thus,
reducing the demand for many commodities. The change in real
incomes and relative prices has distributive consequences that can
significantly deepen and widen poverty and, limit the poverty
reducing elasticity of growth. This is particularly serious given that a
range of 90 – 150 million Nigerians are estimated to be living below
$2 a day.
e. The supply shock has inevitably altered the path of inflation in 2012
and 2013 as Staff estimates projections have shown that inflation
levels will rise above earlier projections and elongate the period for
attaining target inflation rate of under 10% from February 2012 to
late 2013.
f. The international economic outlook for Euro zone remains very
bleak as the political system grapples with the challenges of
sovereign debt and the dangers of contagion. The signs of recovery
in the United States‟ economy are good and investors have
responded positively to the decision of the Federal Reserve to
maintain a policy of low interest rates to the end of 2014. The EU
ban on imports of Iranian crude and, the ongoing crisis in Syria and

the good signs of US recovery all suggest a good outlook for
Nigerian crude prices at least in the near term. High crude prices
offer Nigeria with good opportunities to build reserves and to
generate
additional
revenue
to
finance
infrastructural
development. However, the benefits are conditional on a
transformation of the fiscal system (1) to bring into compliance with
provisions of Fiscal Responsibility Act 2007; (2) to significantly cut the
waste in recurrent and capital budget; (3) to significantly raise the
share of investments in infrastructures and (4) to shifts to
performance budgeting from the current line item budget.
Key Concerns
a. The growing levels of unemployment from 12.3% in 2006 to 23.9% in
2011 is serious especially since the most active population group
(16-44) are the most affected. The coincidence of rising
unemployment and real GDP growth is inconsistent with Okun‟s Law
given that an average growth of 6.8% in the period is not creating
jobs. It is expected that as the economy grows beyond a threshold
(3% in the US), unemployment falls. The NBS claims that agriculture,
services and wholesale and retail trade are the growth drivers.
Typically, the formal employment elasticity is not high enough to
provide decent jobs for a growing labor force.
b. Despite the much vaunted emphasis on FDI and Portfolio
investments, the inflows are very small compared to outflows of
investment income and service payments. For instance, available
data for the first three quarters of 2011 shows that whereas, the net
outflows from investment incomes and services averaged N1.6
Trillion per quarter, the net inflows from FDI and Portfolio investments

averaged N408 billion per quarter. Thus, the economy has to
maintain a surplus trade balance of an average of N1.38 Trillion and
supplemented by remittances from its top quality labor force
drained to Eurozone, North America and other countries to offset
the hemorrhage of investible resources. The challenge for policy
makers is how to alter incentives through new institutions and
competitive infrastructures and policy environment to alter (1)
composition of output and (2) composition of exports to align (1)
Nigeria‟s aggregate demand and aggregate supply and (2)
increase the job elasticity of economic growth. Clearly, such
structural issues fall within the domain of fiscal authorities.
c. The size of the fiscal deficit and public debt and its crowding-out
effects on credit to real sectors of the economy and implications for
monetary aggregates has been a major concern since the global
financial crisis impacted on Nigeria in 2008. In addition, the monthly
“FAAC effect” has tended to unsettle the money market causing
the interbank rate to exhibit FAAC related volatilities. It is necessary
for the fiscal authorities to better manage the allocation of the
Accruals to the Federation Account in Fiscal Year 2012 in ways that
do not unsettle the money market.
d. The performance of the capital market is also a key concern. In 2011 it
lost about N2.2 Trillion of its value with Banking Stocks the worse hit. In
2012 it is important that the vulnerabilities of the market are addressed.
A more supportive fiscal regime will minimize the need to mop up
liquidity and raise MPR which seems to have the expected theoretical
effects on stock prices, market index and market capitalizations.

Deciding Issues
1. The supply shock is already inflationary and its dynamic and general
equilibrium effects are still unfolding. An expansionary monetary policy at
this time is inappropriate: it will amplify the inflationary impacts of the
supply shock without delivering a positive output response or a reduction
in unemployment. It may also, undermine the commitment to a stable
exchange rate, which is key to achieving inflation targets. For it is obvious
that (1) stable prices of PMS depend strongly on the stability of the stable
exchange rate and (2) the price of PMS has significant effects on
headline inflation.
2. Holding
a. allows the menu of tightening policies of 2011 to work through the
economic system;
b. provide investors policy stability as they plan their investment
strategies for 2012 and beyond; and
c. Incentivizes the fiscal authorities to undertake the fiscal and
associated fundamental reforms required to change the incentive
system, begin to build the infrastructural system that will make the
economy competitive in oil and gas, solid minerals, industry and
agriculture so as to create the jobs needed to reverse the trend of
unemployment.

4.0 KIFASI, DANLADI
Key domestic macroeconomic indicators were largely favourable in 2011.
Overall, GDP grew by 7.69% for 2011, marginally lower than the 7.78% recorded

in 2010. However, unemployment increased from 21.4% in 2010 to 23.9% in 2011.
The rising rate of unemployment, which is of great concern, is being addressed
by government through making employment generation one of the cardinal
objectives of the Transformation Agenda.
2. The year-on-year headline inflation rate which was 11.8% in December, 2010
moderated to 10.3% in December, 2011. The inflationary pressures moderated
towards the end of the year following series of monetary policy tightening
measures adopted by the Central Bank of Nigeria, as well as the restraint on
government expenditure which culminated in a lower deficit than planned.
3. The MPC adjusted the mid-point of the exchange rate band from
N150.00/US$1.00 to N155.00/US$1.00 in November, 2011 to stabilize the foreign
exchange market. It is hoped that the deregulation policy of the Government
would further assist in moderating the pressure on foreign exchange demand
and thus boost the external reserve position.
4. Output growth projection for 2012 remained robust. The prospect for robust
GDP growth was anchored on the expectations of increased crude oil
production; stable naira exchange rate; and increased credit delivery by banks
due to the operations of AMCON, amongst others.
5. Forecasts for inflation for 2012 based on N97 per litre of petrol indicate that
the year-on-year headline inflation will remain above 10.0% but not likely to
exceed 13%. This is premised on the maintenance of the prevailing monetary
policy stance and interest rate regime as well as government‟s initiative to
control expenditure and minimize budget deficit.
5. In view of the above, I recommend that the MPR should be retained at the
current level of 12% for the next two months when another review will be due for
consideration.

5.0 LEMO, TUNDE
The Global economic outlook remains unstable and growth projection has been
revised downwards by IMF to 3.3% in 2012 well below the unimpressive growth of
3.8% in 2011. Euro area remains a major concern as it is almost certain to shrink
in 2012 largely as a result of unresolved debt crises in a few member countries.
US economic growth forecast in 2012 may be affected by the recession in Euro
area. Japan recorded trade deficit, the first in 30 years – no thanks to the
appreciation of the yen. The global economy‟s growth is therefore largely
expected to come from the BRIC countries and Sub-Sahara Africa.

On the domestic front, output projection is fairly robust in spite of the current
security challenges. GDP growth estimate in 2011 was 7.69%, slightly lower than
7.87% recorded in 2010. The 2012 growth estimate of 7.2% will largely be on the
back of the agricultural sector which is expected to benefit from additional
bank credit, now made possible by the CBN led NIRSAL programme. The stable
crude oil price outlook will also help to anchor this expectation.

Inflation outlook presents an upside risk as a result of the pass through effect of
the partial deregulation of petroleum product prices, extension of the 2011
budget implementation to the first quarter of 2012, continued implementation of
the national minimum wage as well as the expected increase in the tariff on
importation of rice and wheat during the year. This can be further heightened
by any increase of the benchmark price beyond USD70 per barrel by the
National Assembly. This is clearly not recommended.

In my view, the recent partial deregulation is painful but necessary to ensure the
country‟s long term fiscal sustainability and therefore commendable. The nearterm inflation outlook however confirms that the inflation pressure will be short-

lived and it is projected to moderate after the second quarter of 2012 with
complementary tight fiscal stance.

The foreign exchange market is relatively stable with mild accretion to reserve in
spite of the high demand of foreign exchange in the second half of the year.
The outlook is stable as international crude oil price is expected to be strong,
given the on-going EU sanction on Iran and the inability of Libya to resume
crude oil export.

Given the stable forex outlook, the present level of liquidity in the system and the
indication of moderation of inflation after the second quarter, as well as the
relatively high money market rates of up to 15:7%, maximum and marginally
positive real interest rates, further tightening may be in expedient now and may
therefore constrain growth.
I therefore vote as follows:
(a) Retention of the MPR at 12% as well as the symmetric corridor of +/- 200
basis points
(b) 8% of CRR to remain unchanged
(c) Minimum liquidity Ratio of commercial banks to remain 30%


6.0 MOGHALU, KINGSLEY CHIEDU
As the Monetary Policy Committee considers its position on the Monetary Policy
Rate and other indices of monetary policy at its first meeting in 2012, I believe
the MPC should hold the MPR at 12% and adopt a wait-and-see posture until its
next review meeting in March 2012. The Committee should also hold the Cash

Reserve Ratio at 8% and maintain the present corridor of plus/minus 2% for the
Standing Lending Facility and the Standing Deposit Facility.
The most important development since our last meeting in November 2011 was
the partial deregulation of the price of Premium Motor Spirit (PMS) at the
beginning of 2012, which has introduced a price shock in the economy. Despite
this development, which the MPC anticipated and factored into its decisions on
the MPR in the second half of 2011, there is no overwhelming argument to raise
the MPR at this time. There are several reasons to hold steady, some of which I
briefly outline below.
Firstly, it is essential to pause and give adequate time for the pass-through
effects of previous rate hikes – the last of which, from 9.25% to 12% in October
2011, was a steep increase – to filter through the economy. A rate hike at this
time could introduce serious disequilibrium into the economy when added to
the initial price shock of the partial fuel subsidy removal.
Secondly, staff estimates indicate that headline inflation will go up to 14.5% at
the end of the second quarter of 2012, and that Core and Food Price Inflation
are projected at 16.1% and 14.5% respectively. While these projects are
significant, they do not argue for a rate hike at the present time because a
detailed study of 17 previous fuel price hikes over the past nine years since 2003
have established that in the medium to long term such fuel price increases have
not had a direct causative relationship with inflation. The implication, then, is
that if all things are equal, the price shocks we have witnessed in January 2012
as a result of fuel subsidy removal may not be sustainable. Staff projections
point to an ultimately downward trend in inflation back towards a single digit by
the end of 2013.
Thirdly, raising rates when, as now, it is not absolutely necessary will stifle the
growth of credit to the private sector, in particular the real sector.

Fourth, at a time when the global economic looks bleak and the threat of a
recession looms in several industrialized economies especially the Eurozone
countries, it is wise to be cautious. While there is no reason to adopt an
accommodative monetary policy stance in 2012, and in fact the possibility of
further monetary tightening remains if circumstances warrant, it appears more
appropriate to hold for now.
Finally, it should be stressed that the monetary policy stance of the MPC for the
remainder of 2012 will depend largely on the fiscal authorities‟ continuation of
measures to improve fiscal discipline. Should fiscal expansion resume, the MPC
will have no choice but to resume monetary tightening in order to maintain
price stability. This is quite apart from the important issue of the need to
maintain positive interest rates depending on how much, in fact, inflation
increases in 2012. This is why it would be a matter of concern if the legislature
were to change the benchmark crude oil price of $70 in the 2012 budget to a
higher figure of $75 or $80. Such an action would do more harm than good to
price stability.
Overall, on the balance the MPC should maintain the MPR, CRR, Liquidity Ratio
and the exchange rate at their present levels, in order to avoid running too far
ahead of possible inflation, and in order to foster an environment that supports
real sector growth. This is especially important in an environment of a high
unemployment rate of 23%.

7.0 OLOFIN, SAM
The long awaited removal of “fuel subsidy” (for want of any other more
appropriate name) as a necessary major fiscal policy step in the much needed
fiscal consolidation process has at long last been taken. It would appear that it

had become sufficiently obvious to the fiscal authorities that this so-called
subsidy, with all its attendant rent seeking leakages that was increasingly being
funded from government borrowing was no longer sustainable. There are also
strong indications that the fiscal authorities in the aftermath of the partial
removal of the subsidy, and in reaction to its fall-out effects, are beginning to
see the need for strong commitment to fiscal prudence. This is a very much
welcome development, if the major domestic and external challenges
confronting a fragile single commodity dependent economy like ours are to be
effectively tackled. This is particularly more so, if the uncertainty surrounding the
weak and sluggish recovery of the country‟s major trading partners are taken
into consideration. From the monetary policy perspective of ensuring stable
prices, the tight monetary policy stance of the last several meetings should, all
things being equal, ameliorate the inflationary impact of this measure. An initial
predictable upward adjustment in other prices in response to the shock is to be
expected; but there is no reason to believe that this would translate into a
sustained inflationary pressure in the medium term, if the experiences with earlier
hikes in petroleum prices are anything to go by.
Other developments in the economy show that the overall GDP growth rate is
likely to be sustained around 8 percent in 2012, without significant impact on the
level of unemployment. The NBS recently released figures show that the
unemployment rate remains high and was estimated to have increased from
21.4 percent in 2010 to 23.9 percent in 2011. Headline inflation rate remained at
a two digit level, hovering around 10-12 percent prior to the partial removal of
the petroleum subsidy. There is strong evidence that measures taken to curb the
speculative attack on the Naira at the October 2011 extraordinary meeting are
continuing to succeed in stabilizing the exchange rate, despite the observed
slight depreciation of about 5 percent in the value of the Naira.

The short to medium term outlook for the economy and the corresponding
policy challenges suggest that there may be no need for substantial revision of
the monetary policy measures put in place at the October and November 2011
meetings. As much as there may be justifiable fear of inflationary pressure
resulting from the PMS subsidy removal, this is not likely to be significant enough
to warrant additional tightening measures at this time. The challenges of
sustaining the stability in the foreign exchange market and that of improving the
rate of accretion to external reserves as a buffer against any likely external
shocks also remain. While real interest rates remain at levels that are less than
competitive for attracting net direct foreign investment compared with
countries like Ghana and South Africa, the more pressing need for achieving
greater competitiveness lies with ensuring a safer business environment devoid
of social unrest and insecurity.
In the light of the foregoing there may be no need for any further major tinkering
with the MPR, the CRR and LR at this meeting. Rather, more time should be
allowed for the full impact of the various policy measures introduced at the last
two to three meetings to take effect before any further reappraisal. One would
therefore vote for leaving the MPR and other related measures at their current
levels, while we monitor any significant domestic and/or external developments
that may warrant further major policy interventions in the near future.

8.0 OSHILAJA, JOHN
The Monetary Policy Committee unanimously decided today to maintain its
Policy and associated interest rates at levels initiated at our extraordinary
meeting of October 2011. The new FX trading bands first announced in
November also remain unchanged. With inflation just beginning to recede last
year, this was also a unanimous decision to withhold further preemptive moves

in order to allow market supply and demand adjustments to naturally settle firstorder effects of recent sharp increases in domestic petrol prices.
The Public should be aware that in price indices monitored by the Committee,
there are other quantitatively weightier components besides PMS to consider
(imported foodstuffs, to name just one). This in no way diminishes due
recognition of the hardships and pains expressed by the Public in the immediate
aftermath of the Federal Government‟s abrupt action on its PMS subsidy. Our
decision was supported by an objective review of behavioral effects of prior
price-hikes, and econometric projections suggesting that the deflationary trend,
which first began surfacing in the closing stages of 2011, is likely to resume in
earnest; possibly before the end of next year.
The key ingredient to successfully realizing MPC expectations for 2012-13
nonetheless remains the fiscal stance of Government. All bets (and maybe
even gloves) come off, however, if Government continues executing poorly on
initial, meaningful, steps towards boosting domestic productive capacities and
employment. Better execution entails, among other factors, attacking blatantly
wasteful recurrent expenditures with conviction, and concentrating the savings
achieved on high-impact investments – i.e. in public, productivity-enhancing,
goods and services – and social safety initiatives.
The type of revisions that pass in a reconstituted 2012 Federal Budget should
offer further clues on prospects for our current poise on inflation management
this year.
I agree with the maintenance of our current non-accommodative monetary
stance, and foresee interesting opportunities arising for further refinements in
implementation. These should be aimed at curbing local financial market
inefficiencies (another source of Public Subsidization, albeit of the implied
variety). Such refinements could make available Policy tools less blunt and

more responsive. However, should the consolidations proposed by the Fiscal
Authorities turn out to be ineffectual for the purposes officially stated then, in
ultimate fulfillment of our Price Stability mandate, the MPC may have little
choice but to recourse to blunter, more aggressive measures than were initiated
last October.
9.0 SALAMI, ADEDOYIN
Despite the increase in the Pump Price of Petroleum Motor Spirit (PMS), my vote
to support the option of leaving Monetary Policy instruments unchanged was
not a difficult one. Simply stated, monetary policy should not react to the kind of
structural change, represented by higher fuel prices, even though it will
adversely affect prices.

If the economy in Nigeria is to grow at the kind of pace which its potentials
suggest and the challenge posed by unemployment requires, reform to ease
structural bottlenecks and reduce incentive for resource misuse becomes
cannot be understated. This, in my judgment, is the light in which the partially
successful attempt to introduce a regime of fully market determined prices in
the „downstream‟ oil sector should be seen. Notwithstanding the inability of
Nigeria‟s government to remove itself from determination of prices, the
reduction in subsidy achieved will doubtless raise inflation.
Indeed Central Bank Staff estimates suggest that in the absence of other shocks,
Headline Inflation will peak at 14.5 percent at the end of the 2nd quarter of this
year. Similarly, Core and Food Price Inflation are expected to be 16.1 percent
and 14.5 percent respectively. These estimates are sharply higher than forecasts

made ahead of the increase in fuel prices. It is noteworthy that Bank Staff
expect that inflation will return to single digit at the end of the 2013.
It is however pertinent to draw attention to potential „flies in the ointment‟ which
may leave colleagues and I on the Monetary Policy Committee no choice but
to deal with second round effects – perhaps aggressively. Noises from the
National Assembly suggesting that the Budget Benchmark Price of crude oil will
be raised are a source of concern. If, as proposed, the budget benchmark price
rises to US$75 per barrel, the resulting increase in government sector – Federal
Government and States – holds the potential to exert a destabilizing influence –
especially on Foreign exchange.
The imperative of tightly managing fiscal conditions cannot be overemphasized.
The US Federal Reserve Bank‟s announcement that it will keep interest rates at
current levels until 2014 may serve to keep crude oil prices firm as „cheap
dollars‟ provide funding for speculative demand for crude oil thereby negating
the adverse effect of slower growth in global output on the demand for oil. I
remain concerned that firmer oil prices will inspire fiscal looseness in Nigeria.
Bearing in mind that the 32 percent growth in Credit to the Private Sector
recorded last year, indicated by provisional CBN data, overstates the true
position, as it doesn‟t discount for the influence of AMCON bonds, loose fiscal
policy will ensure that the environment remains unfriendly to growth in credit.

10.0 UCHE, CHIBUIKE
For the Nigerian economy, 2012 started on a very shaky note. The withdrawal of
„subsidy’ on Petroleum Motor Spirit (PMS) by the federal government led to a
nationwide strike which culminated in a compromise PMS pump price of 97
Naira per litre. While this fifty percent increase in the pump price of PMS is

expected to have inflationary consequences for the Nigerian economy, I
strongly believe that raising the MPR at this stage will be inappropriate. This is so
because the current MPR of 12 percent is unlikely to be eroded into negative
territory by the inflationary consequences of this increase in the pump price of
PMS in the short run. It has for instance been projected that this policy action will
lead to an increase in the headline inflation from 10.3 percent (December 2011)
to 11 percent (March 2012). Although inflation may further increase in
subsequent quarters of 2012, the expectation is that it will gradually trend
towards single digit in 2013.
In opting for the maintenance of the status quo, I am also mindful of the fact
that borrowing rates are already too high. The negative impact of high interest
rates on the growth of the real sector is well known and documented. Given
the entwinement of banking sector health and stability and real sector growth,
raising the MPR at this stage will also not be beneficial to the health of our
banking sector which is still recovering from a major crisis.
Despite its inflationary impact, the increase in the pump price of PMS and the
ensuing national crisis that followed has had some positive consequences for
fiscal management in the country. Government has for instance now
committed to prudent financial management. The issue of widespread
corruption in government has also, thankfully, now been brought to the fore.
Government fiscal indiscipline which has sometimes been fuelled by corruption
has, in my view, been both a major cause of inflation and an impediment to the
formulation of effective monetary policy in the past. I am therefore cautiously
optimistic that current national developments could mark a turning point for
monetary policy formulation in Nigeria.

11.0 YAHAYA, SHEHU
I vote to retain the MPR at the current level of 12%, along with the CRR and the
corridor. My position is based on the following:
The partial removal of the subsidy on PMS has already impacted on petrol
prices and, thereby, on price levels of food, transport and others. While
some of the secondary effects are still unfolding, the main price effects
have already hit the economy
Headline inflation is projected to peak in the second quarter of the year
and, thereafter, begin to moderate
The Naira exchange rate is expected to remain stable at least at the short
term, partly due to the stable outlook on oil prices (the decline in demand
due to slow down of the economies in Europe and US may be
counterbalanced by uncertainties surrounding Iran, Libya) and the
gradual building up of reserves.
It is hoped that fiscal injections in the economy would be moderate within
the first months of the first quarter of 2012
The effects of monetary policy tightening from 2011 are still being played
out
In the near term, there are plans to take important steps to develop
agricultural production and agriculture value chains and it is important to
have a supportive monetary stance
Given the circumstances described above, we propose to maintain the current
level of the MPR and to carefully watch developments in the economy in the
next two months to determine subsequent courses of action.

12.0 SANUSI, LAMIDO SANUSI
Governor of the Central Bank of Nigeria and Chairman of the
Monetary Policy Committee
We are holding our first meeting of 2012 at a time that is possibly a turning point
in the economic history of the country. The dark clouds in the global horizon
remain present. Forecasts are for slower growth rates in the developed world
and emerging markets. The violence and tragic bombings in northern Nigeria
continue to pose a source of concern for investors, and efforts are underway to
find a lasting solution. The recent demonstrations by citizens and opposition
parties against fuel subsidy removal have also raised temperatures in the
political space.

In spite of all the above, there are many positives to take from recent
experience. First, the Federal Government has significantly reduced the fiscal
burden of unsustainable subsidies and the partial reduction in subsidies was the
first in over five years. Secondly, the protests have brought to the fore a number
of important concerns that have been central to us - opacity in the subsidy
regime, poor execution of capital projects, high levels of recurrent expenditure
and overheads and general questions about governance and transparency.

As a result, by implementing this most difficult of reforms and managing the
fallout successfully, the government has laid a marker for its commitment to
other reforms including electricity tariffs and deregulation of the oil industry. On
the other hand, the issues raised by civil society, if kept in focus and in the public
space, should move us towards an era of better fiscal management, tighter
controls on spending, improvement in foreign exchange savings and thus a
more stable environment.

The principal factors underpinning inflation outlook in the short-term appear to
be supply side factors- mainly the cost-push effects of higher fuel and
transportation costs compounded by the impact of anticipated higher tariffs on
imported food like rice, aimed at protecting domestic growers and processors.
In such a situation, a monetary response is not, to my mind, the appropriate one.
These structural factors will be addressed by improving refining capacity,
reducing dependence on imported fuel and investing in agricultural
productivity (irrigation, storage, seeds, fertilizer, training, market access, finance
etc.) in a manner that makes local output cheaper and more competitive vis-àvis imports.

The position is further supported by recent experience. December headline
inflation at 10.3 percent per annum is in line with our implicit high single digit
target and, without subsidy removal, was forecast to decelerate further down to
around eight percent per annum by middle of the year. However, sequel to the
fuel subsidy removal, the forecasts have changed and staff estimate inflation to
range between 11% and 14.5% over the first six months of the year and begin a
deceleration in the third quarter, heading back close to single digit at the end
of 2013, ceteris paribus. With yields in the fixed income market generally in a
range above the inflation rate, we expect real returns to remain positive and
competitive and indeed we have seen no reversal of capital flows in the face of
strong signals that we will not tighten at this MPC. The exchange rate has
remained fairly stable, albeit pushing the upper region of our band and records
of every increase in fuel prices going bank to 1998 show that the initial spike in
inflation is followed almost immediately by a deceleration, thus weakening the
correlation between the level of fuel prices and the rate of inflation. The
principal concern therefore, is not so much inflation, which is our mandate, but
the impact on the budget line and welfare effects on the most vulnerable

segments of society, particularly given the rise in food prices and the weight of
food in the consumption basket. This is a matter for the fiscal authorities, and the
need for designing and giving effect to safety-nets cannot be overemphasized.
For us, as a monetary authority, the main concern comes from the signals that
the legislature plans to change the benchmark oil price in the 2012 budget from
US$70/bbl. to US$75/bbl. or even US$80/bbl. This is an indication of a lack of
total commitment to fiscal discipline and consolidation.

At US$70/bbl., we believe the fiscal stance would be compatible with price
stability and the current interest and exchange rate stance, without placing
foreign assets at risk. An overly ambitious expansion may constitute a big risk to
price stability, leading to a rise in already high interest rates, or a reversal of the
positive trend in reserve accumulation. These will have an impact on the real
economy and its ability to cope with external shocks. We can however wait
until the next MPC meeting for clarity on the fiscal stance and see if it warrants a
change in monetary policy.

For the above reasons, I vote for maintenance of the status quo for now, in MPR,
CRR, LR and exchange rates.

I am satisfied that tightening at this point will be too pro-cyclical and unlikely to
reverse any inflationary consequence of supply-side shocks.

I vote for:
1. Maintaining MPR at 12% ± 2%
2. Maintaining CRR at 8%
3. Maintaining LR at 30% and
4. Maintaining exchange rate at N155/$1 ± 3%