CBN Dismisses Possibility Of Cutting Interest Rate This Year
If you were among those still hoping that the Central Bank of Nigeria, CBN will cut the interest rate this year, you may be hoping in vain.
First, the apex bank doesn’t see the price of oil falling below $80 a barrel this year, that is more stable foreign exchange inflow but even at that, it expects to keep monetary policy tight until inflation returns toward its target, Governor Godwin Emefiele said.
So long as U.S. sanctions take effect on Iran in November, “I do not expect the price to close less than $80 this year,” Emefiele told reporters in London on Sunday.
The CBN has held interest rates at a record high 14% since 2016 to fight inflation that has breached its target band of 6% to 9% for more than three years and quickened in August for the first time in 19 months.
“The current state of tightening will continue until at least we see inflation attaining those levels that have been set” as a target, Emefiele said.
And as for the foreign exchange market, Emefiele also said Nigeria would continue to intervene to support the exchange rate, although he noted the pressure on the bank and the country’s currency reserves had been less than those on other emerging markets.
“We will continue to intervene,” he said. “We believe in a stable exchange rate regime.”
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