Naira faces further devaluation

Nigeria's Central Bank Governor Lamido Sanusi said on Monday the bank would review its target band for the naira in the next few days, and depending on where the exchange rate settles may move its midpoint to 155/156 to the dollar, compared to its current 150.The bank's policy is currently to maintain the naira within around 3 percent either side of the 150 level. 'We'll give it a few more days and see where it settles finally and then we've got to come out with a new transparent band,' Sanusi told Reuters in an interview on the sideline of an investment conference in Nigeria's capital Abuja.'...Both the midpoint and the band could change. Whatever it is, we'll let the market know very soon ... It's more likely to be around 155/156.'He added that monetary policy was likely to remain tight for the foreseeable future to ward off inflationary pressures. 'We think that we will maintain ... a high interest rate environment.We're certainly going to keep money tight,' Sanusi said. 'There are a number of pressures that suggest we'll need tight monetary policy for a while yet.'He said inflationary pressures would come from efforts to 'sterilise' the bonds of state-backed bad bank AMCON, which was set up to bail out nine banks that were judged near to collapse in 2009.The naira hit an all-time low against the dollar earlier this month, as worsening global economic conditions curbed risk appetite and dollar demand from importers and speculators increased.
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