Nigeria's central bank retains interest rate at record-high 14%

Godwin Emefiele cited the risk of increasing inflationary pressure in the decision by the bank’s monetary policy committee to hold the rate at its current level.

Godwin Emefiele, Governor of the Central Bank, who chaired the 262nd Monetary Policy Meeting announced the decision of the committee to hold the key lending rate on Tuesday, July 24, 2018.

At the meeting, the CBN MPC decided to retain the Monetary Policy Rate (MPR) rate at the current level of 14%, Liquidity ratio at 30%. The rates were first raised in July 2016 to combat rising inflation.

Emefiele said majority of the members of the committee voted in favour of holding rates after the Apex bank two-day meeting in Abuja.

He cited the risk of increasing inflationary pressure in the decision by the bank’s monetary policy committee to hold the rate at its current level.

The CBN has been holding the key lending rate since 2016 when Nigeria entered into its worst economic recession in 25 years amid global oil price slump and the troubled naira.

The Committee believed that the decision is consistent with achieving the single-digit inflation target rate.

The annual inflation rate fell marginally to 11.23% in June 2018 from 11.61% in May.

At its last meeting in May, the Committee reached the decision on the consideration to await more clarity on economic activities.

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