CBN retains interest rate at 11.5%

The Central Bank of Nigeria (CBN) has retained interest rates at 11.5 percent, as the country struggles with a high inflation rate.

The CBN said on Monday during the Monetary Policy Meeting in Abuja that pushing borrowing costs to restrictive levels will not favor Nigeria’s economic recovery from the Covid-19 pandemic.

The US last week raised its rates to curb the country’s growing inflation which is above Fed’s two percent.

Nigeria’s inflation is currently at 15.7 percent which is still above the single-digit targeted by the CBN.

The Central Bank Governor Godwin Emefiele said the sanction against Russia would have significant downside risk to the global economy.

Emefiele also highlighted that the gains of economic growth which were recorded as a result of lifting restrictions have been eroded by the Russian-Ukraine crisis.

He blamed the high energy prices experienced by the country on the Russian-Ukraine conflict.

Emefiele said the MPC noted that high energy prices have aggravated Nigeria’s inflation.

He also said that the poor power supply has also compounded the country’s inflationary pressure.

Based on these considerations, Emefiele said the MPC retained the Monetary Policy Rate at 11.5 percent; asymmetric corridor at +100/–700 basis points around the MPR; Cash Reserve Ratio at 27.5 percent; and Liquidity Ratio at 30.0 percent.

Emefiele said three members voted for a 25 basis points increase, one member voted for a 50 basis points increase, and six members voted for the retention of the rates.