‘A CBN governor shouldn't talk TOO MUCH.....

Mixed reactions yesterday trailed the suspension of Mallam Sanusi Lamido Sanusi as CBN Governor from office.
In his reaction former Vice President Atiku Abubakar asked the suspended Governor to approach the Court to seek redress and challenge his suspension in the interest of constitutionalism and the rule of law, just as he said that President Goodluck Jonathan has no such powers to suspend the CBN governor from office.

FBN Capital

FBN capital in its note to local and international investors said “this morning’s suspension of the CBN governor, Lamido Sanusi, on the instructions of the President can be traced to a series of heated exchanges on flows into the federation account.

Indeed in early January the local newswires reported that the president had asked the governor to resign after the leaking of a letter in which Sanusi is said to have itemised discrepancies in the finances of the state oil corporation.

What next? We will assume that the suspension does not prove the trigger which derails the pursuit of a central element of the CBN’s core mandate, the attainment of exchange-rate stability.

“Sarah Alade, senior deputy governor with a solid track record in monetary policy, has been appointed acting governor. She has already restated the CBN’s commitment to its core mandate. The MPC takes its decisions on a majority vote. Sanusi was highly persuasive as chair of the committee but his views echoed those of senior policymakers.

“Their policy aims are a managed exchange rate and strong currency. We are not aware of any support within officialdom for a float, or even a rate to reflect said fair value or inflation differentials. There are two vacancies to be filled within the MPC, one internal and the other external.

“The pressure on the exchange rate before this morning’s development stemmed from oil production losses and the fear that the offshore portfolio community would exit Nigeria en masse in the headwinds of tapering by the Federal Reserve. Dr Alade is the acting governor until a new appointment to take over in June on the expiry of Sanusi’s five year term. We do not buy into the argument that the new person will be the “puppet” of the presidency.

“In our view the presidency’s understanding of the investment community does reach that far. Also, the National Assembly has to ratify the appointment and has its own agenda. We assume that it does not have to ratify the suspension. Clearly we do not know the identity of the new governor. We have said for some time that the new person could slow not reverse the tightening of bank regulation because he/she will have less influence over the industry’s executives”.

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