The Central Bank of Nigeria has decided to keep its benchmark interest rate at 14 percent. The apex bank also kept its cash reserve ratios for commercial banks at 22.5 percent.
The CBN Governor, Godwin Emefiele said the bank’s Monetary Policy Committee (MPC) had voted to retain the headline rate on Tuesday.
“In consideration of the challenges weighing down the domestic economy and the uncertainties in the global environment, the committee decided by a unanimous vote of eight members in attendance to retain the MPR (Monetary Policy Rate) at 14 percent,” he said.
Emefiele also told reporters the bank wanted to end the spread between the black market and official foreign exchange rates, adding that the recent rise of the naira versus the dollar showed that the central bank’s policies were working.
“We would prefer a convergence that will go southward rather than northward, but the fact that we have seen the convergence (going) southward gives us a lot of hope that things are working in the right direction,” he added, refusing to give an exchange rate target.
The CBN decision was announced hours after the National Bureau of Statistics said the economy contracted by 0.5 percent in the first quarter from a year earlier. This marks a fifth consecution contractions in the economy due to decline in oil output.
