Published On: Tue, Jul 25th, 2017

Nigeria central bank holds benchmark interest rate at 14 pct – Godwin Emefiele

Godwin EmefieleNigeria’s central bank held its benchmark interest rate at 14 percent on Tuesday, its governor said.

Governor Godwin Emefiele said two of the eight members who attended the Monetary Policy Committee (MPC) meeting had voted to cut the headline rate.

Economists polled by Reuters last week predicted that the central bank would keep the main interest rate unchanged.

Nigeria, an OPEC member which has Africa’s biggest economy, is in the second year of a recession largely caused by low oil prices. The country relies on crude oil sales for around two-thirds of government revenue.

“In consideration of the headwind confronting the domestic economy and the uncertainty in the global environment, the committee decided by a vote of six to two to retain the MPR (monetary policy rate) at 14 percent,” said Emefiele.

The bank also kept its cash reserve ratios for commercial banks at 22.5 percent.

Dollar shortages have been a hallmark of the recession and the country has at least six exchange rates, including an official rate, a black market rate and one for Muslim pilgrims.

The central bank governor told reporters the bank was heartened by the emerging convergence of a market-determined rate for investors and a retail rate set by licensed exchange bureaus.