Nigeria, June 10 -- The Central Bank of Nigeria (CBN) may need to sterilise FX inflows into Nigeria from higher oil prices in order to rein in inflationary pressures, the International Monetary Fund (IMF) said Tuesday.

Sterilisation, a monetary policy tool, allows the central bank to limit the impact of foreign exchange activities on the domestic money supply by offsetting excess liquidity in the financial system.

IMF issued the advisory in its latest Article IV consultation report on Nigeria, noting that while rising crude oil prices could boost foreign exchange inflows into the country, it is capable of driving inflation higher.

"Given the changed inflation outlook, keeping the MPR unchanged for now and carefully monitoring inflation...