CBN Holds Benchmark Rate at 11.5% as Naira Weakens
By Bashir Olanrewaju
The Central Bank of Nigeria’s Monetary Policy Committee voted unanimously to hold its benchmark interest at 11.5 percent on the same day the regulator devalued the national currency.
All other parameters were also left unchanged, CBN Governor Godwin Emefiele told reporters at a briefing on the latest meeting of the policy committee.
The MPC meeting came on the heels of latest inflation numbers, which slowed to 18.12 percent in April but remain way above central bank targeted range of between 6 to 9 percent. Latest gross domestic figures of 0.51 percent for the first quarter are indicative of a sluggish recovery from last year’s recession.
“In the view of the MPC, although the economy has recovered from recession, the recovery was very fragile given that the GDP of 0.51% was still far below population growth rate,” Emefiele said.
Nigeria has seen inflationary pressures aggravated in the past year by the effects of the lockdown to combat coronavirus, the plunge in revenue amid low demand for oil, its main export, and worsening insecurity across key agricultural areas.
The CBN devalued the naira by as much as 8.5 percent, a step toward unifying the country’s multiple exchange-rate system, which is a key condition for World Bank financing to help Nigeria fill its budget gap.