Fuel subsidy: Inflation to hit 14.5% in 2012 -CBN

THE Central Bank of Nigeria (CBN) has said Nigerians will experience 14.5 per cent inflation rate in 2012 as a result of the fuel price hike.This is just as the apex bank retained the interest rate benchmark, the Monetary Policy Rate (MPR), at 12 per cent.The CBN governor, Mallam Lamido Sanusi, while briefing the media at the end of the maiden edition of the Monetary Policy Committee (MPC) meeting held to review the domestic economy in 2011, at the bank's headquarters in Abuja, commended the Federal Government for the partial removal of fuel subsidy which, he said, was in the interest of the country in the long run.Mallam Sanusi, who disclosed that the pains Nigerians would go through as a result of the partial deregulation was in the short run, added that Nigerians would experience inflation rate of between 11 per cent and 14.5 per cent in 2012.However, he said as from 2012, the level of inflation would reduce, when all the palliatives the Federal Government put in place would have started to yield dividends.Decrying the 23.9 per cent unemployment rate in the country, Mallam Sanusi, who chaired the maiden MPC meeting which was attended by all the 12 members, lamented the disconnect between the high output growth and employment.Looking at the outlook for the Nigerian banking sector in 2012, Mallam Sanusi said it was a positive one that would not be adversely affected by the recent negative development in the Euro zones.According to him, the exposure of some of the Nigerian banks to their counterparts in the zone was a healthy one.Sanusi said the partial deregulation in the downstream sector of the economy would help in the increase of the country's external reserves, thus helping in the maintenance of stability in the foreign exchange market.
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