- CBN Keeps Interest Rate at 14%
The Monetary Policy Committee left interest rate unchanged on Tuesday following two consecutive rises in consumer prices and concerns over global slowdown.
The Central Bank of Nigeria led committee kept Monetary Policy Rate at 14 per cent. While the Cash Reserve Ratio and Liquidity Ratio were left at 22.5 per cent and 30 per cent, respectively.
Mr. Godwin Emefiele, the CBN Governor, said the committee decision was based on the current situation. Suggesting that rising interest rate at this time could hurt economic growth despite inflation number rising to 11.44 per cent in December.
Still, the inflation rate is expected to increase in the near-term before moderating towards the third quarter of the year. While this was attributed to election spending and continued disruptions to the food supply in the insurgency prone areas, the MPC also noted that external shocks due to BREXIT negotiations, slowing growth in China and policy normalization in advanced economies are some of the factors expected to affect consumer prices in the first half of 2019.
Despite the International Monetary Fund lowering Nigeria’s growth projection for 2019 to 2 per cent on slower than expected global expansion, the CBN maintained its 2.28 per cent prediction, a 0.8 per cent higher than the 2.2 per cent predicted by the World Bank.
The MPC, however, highlighted unstable global oil market, security issues in the North East and uncertainty associated with the 2019 elections as key headwinds to these projections.