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The Central Bank of Nigeria (CBN) has retained its benchmark interest rate at 14 per cent to check rising inflation, Godwin Emefiele, the CBN governor, said on Tuesday at the end of the apex bank’s Monetary Policy Committee (MPC) meeting, which held on September 19-20.

Emefiele also said that the MPC voted to retain the Cash Reserve Ratio at 22.5 per cent and Liquidity Ratio at 30 per cent.

“The Committee noted that headline inflation (year-on-year) rose again in August, thus maintaining the upward trend since January 2016,” Emefiele said. “The Committee nonetheless, noted that the month-on-month evolution of consumer price inflation has been less phenomenal.”

Last week, the National Bureau of Statistics (NBS) reported that Nigeria’s inflation rate increased by 17.6 per cent in August from 17.1 per cent recorded in the previous month due to an uptick in both food and non-food inflation. Neverthess, the inflation rate, which has now increased for ten consecutive months from 9.4 per cent recorded in November 2015, increased at a much slower pace last month. In deed, food inflation rose by 1.2 per cent, the same pace recorded in the previous month.

The country's inflationary environment caused the apex bank to raise its benchmark interest rate by 200 basis points from 12 per cent to 14 per cent in July.

Kemi Adeosun, the Minister of Finance, had earlier on Monday urged the CBN to lower interest rates in a bid to revive Nigeria’s economy and reduce government borrowing costs.

However, Emefiele said the MPC noted that previous rate cuts had not resulted in increased lending rates by banks to the real economy and lower interest rates could exacerbate the country’s high inflationary environment.

“The MPC noted that stagflation is indeed a very difficult economic condition with no quick fixes: having been imposed by supply shocks as well as fiscal and current account (twin) deficits,” the CBN governor said. “While the imperative for ensuring financial system stability remains, the MPC reiterated the fact that monetary policy alone cannot move the economy out of stagflation.”

Following a ministerial retreat last week to address the nation's economic downturn, the federal government announced on Tuesday that it is considering a $15 billion (N4.72 trillion) fiscal stimulus plan. In the meantime, the government has already concluded plans for a $1 billion Eurobond issuance to fund capital projects in the 2016 budget.