The Central Bank of Nigeria (CBN) has set the moves to save the local currency, the naira, to curtail the adverse impact of the US Federal Reserve reduction of its assets purchase, known as tapering.

CEOAFRICA news desk gathered that the move was also to keep loose fiscal activity in check preparatory to the general elections of 2015.

Analysts however believe that the apex bank will consider further monetary tightening measures ahead of the 2015 elections.

A CBN top official disclosed that it is expected that the Fed may announce that it will start to reduce its asset purchase (known as tapering) from September 18, revealing that it will buy less bonds If that be the case and yield will go up encouraging investors to start moving their funds out of emerging markets to the USA.

He highlighted that the withdrawal of foreign portfolio funds would lead to pressure on the currency, which would fuel increased demand for forex and depreciation of the currency as well as inflation.

He continued however that it will consequently result to monetary policy responding appropriately, through tight monetary policy to encourage inflows to stay and also attract investments.