CBN MPC Communique No. 39 - October 2004
Central bank: cbn | Type: statement | Date: 2004-10-19

PRESS RELEASE
CENTRAL BANK OF NIGERIA, COMMUNIQUE NO. 39 OF THE
MONETARY POLICY COMMITTEE, IN OCTOBER, 2004
The 186 th meeting of the Monetary Policy Co mmittee was held on October 12 th,
2004.
2. Available informat ion since the last meeting of t he MPC indicated that the year-
on-year inflation rate had incr eased from 10.7 per cent in July 2004 to 13.0 per cent in
August 2004. The 12-month mo ving average inflation rate remained unchanged at the
July 2004 level of 19.10 per cent. The exchange rate of the naira was relatively stable,
while the gross official reserves rose further from US $12.48 billion to US $13.27 at end-
September 2004. Br oad money stock (M 2) rose by 9.9 per cent in the first nine months
of 2004, representing an annualized growth rate of 13.2 per cent. This growth rate is
within the 16.0 per cent target set for 200 4. Credit (net) to government contracted
further, reflecting the prudent fiscal operations of the federal government.
3. The Committee was optimistic that the ex ternal reserves would rise further during
the remaining months of 2004, following the high international oil price and the expected
seasonal drop in the demand fo r foreign exchange in the last quarter. The Committee
also expects that a continua tion of prudent fiscal operat ions would help to dampen
excess demand. Nevertheless, the rise in the domestic pirce level was considered
worrisome by the Committee. The Comm ittee agreed to monitor macroeconomic
developments very closely during the rest of 2004, with a vi ew to fine tuning existing
policies if the need arises.
James K. A. Olekah,
Secretary, Monetary Policy Committee,
Central Bank of Nigeria,
Abuja.
th October, 2004