* Markets panicked after Sanusi's removal on Thursday
* Sanusi says alarmed by graft and "crashing oil revenues"
* Doesn't want his job back but to establish principle (Adds bond markets, cbank intervention, Sanusi comments)
By Tim Cocks
LAGOS, Feb 21 (Reuters) - Nigeria's graft-fighting Central Bank Governor Lamido Sanusi said on Friday he would go to court to challenge his suspension by the president - though he does not want his job back, he wants to show that the move was illegal.
President Goodluck Jonathan suspended Sanusi on Thursday, removing an outspoken critic of his government's record on corruption in Africa's top oil producer.
Since the suspension, presidential spokesman Reuben Abati has accused the central bank of procurement irregularities during Sanusi's tenure, most of them dating back to 2011.
Sanusi told Reuters in a phone interview that the bank had followed correct procurement procedures, and he had already answered questions about the allegations by the authorities.
"I'm going to court to challenge the suspension," he said. "I'm concerned about the precedent ... I'm concerned about the idea that if you want to remove someone and you want a way around the law, you just write any kind of letter with all sorts of funny allegations and suspend the person."
Sanusi, who was due to end his term in June, had been presenting evidence to parliament that he said showed the state oil company Nigeria National Petroleum Corporation (NNPC) failed to remit $20 billion it owed to federal government coffers.
NNPC has repeatedly denied Sanusi's allegations, which brought the bank governor into conflict with Jonathan's administration a year before presidential elections.
"I'm not going back. I have had my last day at work. I'm very glad to hand this over," Sanusi told Reuters.
INVESTMENT CLIMATE CLOUDED
Markets panicked over the suspension of a man whose policies are credited with stabilising the naira and bringing inflation in Africa's second biggest economy to single digits.
The naira, at 164.05 to the dollar before the news on Thursday, fell to a record low of 169 before trading was frozen. On Friday it recovered to 164.55 after the central bank intervened with dollar sales. The bank said it hoped to keep it within its target band of 150-160 to the dollar.
Selling pressure eased on debt, with the yield on the 10-year bond easing 18 basis points to 14 percent. The stock market fell to a six and half month low, led by banks.
Longer term, it is unclear whether investors will be put off Nigeria, whose perennial governance problems are balanced on the positive side by attractive prospects, including abundant energy reserves, a potentially huge consumer market and a fast-growing economy about to become Africa's biggest.
JP Morgan's vice head of sub-Saharan Africa research, Giulia Pellegrini, said Sanussi had provided investors with a clear view of the bank's monetary policy. If that should stop, it would become harder for investors to gauge risks, "given the opacity that still characterises other areas of the economy".
However, his opponents say he went above his station as central bank governor to score political points against the administration.
Sanusi said he had no choice. He never intended to be an anti-corruption crusader, but had been alarmed by the sheer extent of losses to the treasury at the state oil firm.
Oil provides 90 percent of Nigeria's foreign exchange and around 80 percent of government revenues.
"I'm trying to get to the heart of collapsing oil revenues," he said, pointing out that in the past year, the country's oil savings had been depleted to $2.5 billion, from $11.5 billion.
"My primary motive ... is that oil prices have not come down, oil output has not come down, (but) oil revenues are crashing, and therefore my job as central bank governor in managing the exchange rate and reserves is threatened."
Nigeria's Finance Minister Ngozi Okonjo-Iweala denied this month that falling oil savings were a result of corruption or patronage. In a Reuters interview Okonjo-Iweala said Nigeria had suffered a production shock because of worsening pipeline vandalism and oil theft.
Jonathan's former mentor, twice president Olusegun Obasanjo, has said oil corruption now is worse than at any time since the end of military rule in 1999, a charge Jonathan dismisses as politically motivated.
"I haven't compared it to any other terms, but I've certainly been alarmed by what I've seen," Sanusi said.
Sanusi made a name for himself two months into the job, in August 2009, when he rescued nine Nigerian banks in the wake of a financial crisis that nearly caused a wave of bankruptcies, forcing out all but one of their chief executives.
That made a rare example of some of Nigeria's most powerful people, and it set a tone that was repeated when he began using monetary policy meetings to decry wasteful government spending.
Nigerians speculate that his outspokenness owes much to his being heir apparent to the throne of Kano, Nigeria's second most powerful Muslim monarchy. It is the relic of a medieval Islamic empire that thrived off trans-Saharan trade routes connecting Africa's interior with its Mediterranean coast.
Sanusi said it was largely psychological.
"If you're a prince you don't have fear of power. You are not intimidated by authority because you've grown up around it," he told Reuters. "You haven't lacked anything. You don't have the desperation for a job that makes you a sycophant."
Deputy governor Sarah Alade has taken over in the interim, with Zenith Bank managing director Godwin Emefiele named to take over in June.
Sanusi's speaking out has also fuelled speculation that he will run for president against the ruling party in Feb. 2015 polls, but he denied he had any political plans.
"I'm going to rest," he said. "I was supposed to start my French lessons in June. I might start a bit earlier now." (Reporting by Tim Cocks; Editing by Peter Graff)