Why CBN Retained Benchmark Interest Rate At 14%
Same of the same?!
On Tuesday, Nigeria’s central bank rose from its monetary policy committee meeting retaining benchmark interest rate at 14%.
The benchmark interest refers to minimum rate investors will demand for investing in a non-Treasury security. It also determines the interest rate financial services providers charge on loans.
It has been at 14% since July 2016.
The MPC said it retained it at the same rate because the recovery Nigeria’s economy has recorded remains fragile.
CBN Governor, Godwin Emefiele said eight committee members had voted to hold the main rate, while one voted for a cut.
All other policy parameters were kept unchanged.
“Inflation in particular requires very close monitoring to gain clarity on the medium-term optimum path of monetary policy,” Emefiele told a news conference.
“Mr. Emefiele’s hints about future monetary easing were pretty clear. It seems that policymakers are waiting for a more substantial fall in inflation before starting to lower interest rates,” said Capital Economics analyst William Jackson.
Inflation is slowing but remained at an elevated 16% on an annual basis in October. At the media conference, Emefiele said he is optimistic consumer price-growth would moderate to one-digit levels in 2018.
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