CBN retains interest rate at 14 percent to stabilize economy

25 Jul 2017
Financial Nigeria

Summary

Emefiele said the Committee noted the easing of inflationary pressures, but it thinks the inflation rate is still high for the apex bank to lower its benchmark interest rate.

CBN governor Godwin Emefiele

The Governor of the Central Bank of Nigeria, Godwin Emefiele, said today that the bank’s Monetary Policy Committee voted to retain the benchmark interest rate at 14 percent in a bid to safeguard the recent improvements in macro-economy.

“The Committee believes that the development of the macro-economy suggests to policy options: to hold or to lower the benchmark,” Emefiele said. “The Committee thinks that there is need to maintain cautious optimism. The argument for holding is premised on safeguarding the gains achieved in the macro-economy in the recent months.”

Last week, the National Bureau of Statistics reported that the country’s Consumer Price Index declined for the fifth consecutive month to 16.10 percent in June compared with 16.25 percent in the previous month.

Emefiele said the Committee noted the easing of inflationary pressures, but it thinks the inflation rate is still high for the apex bank to lower its benchmark interest rate.

Emefiele also announced that the Committee had voted to retain cash reserve ratio at 22.5 percent, liquidity ratio at 30 percent, and the asymmetric corridor around the benchmark rate at plus 200 and minus 500.


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