Nigeria Holds Benchmark Lending Rate At 14 Percent Again

The Central Bank of Nigeria (CBN) kept its benchmark interest rate at 14 percent on Tuesday, Governor Godwin Emefiele said, in a split decision that reflected the bank’s need to contend with both sluggish growth and accelerating inflation.
Emefiele said three of the 10 members of the monetary policy committee who met voted to tighten by 25 basis points. The rate has been at a record high 14 percent since July 2016, and analysts polled by Reuters predicted the bank would again leave rates unchanged.
Nigeria emerged from its first recession in 25 years in 2017 but continues to suffer from sluggish growth and high inflation.
“There is need to maintain the current monetary policy stance and await a clearer understanding of the quantum and timing of liquidity injections into the economy before deciding on possible adjustments,” Emefiele said.
Annual inflation rose in August over the previous year for the first time in a year and a half, driven by food prices. And economic growth dipped to 1.50 percent in the second quarter, continuing a trend of slowing growth that began in the first quarter.
President Muhammadu Buhari, who came to power in 2015 partly on promises to restore Nigeria’s economy, plans to seek a second term in elections to be held in February 2019.