The Central Bank of Nigeria (CBN) yesterday retained the prime interest rate (Monetary Policy Rate) at 12 percent. The rate was left unchanged for the better part of last year, as the central bank strove to curb inflation.
Members of the Monetary Policy Committee (MPC) also voted to leave the banks’ Cash Reserve Ratio at 12 percent and Liquidity Ratio at 30 percent, the central bank governor Sanusi Lamido Sanus said at briefing in Abuja after the MPC meeting.
He said the ratios were retained because of the noticed level of stability in the economy, so far.
Governor of Central Bank of Nigeria Sanusi Lamido Sanusi said he expects interest rate to ease in the shortest possible term.
Market forces are expected to react to the policy within the week.
Data from the National Bureau for Statistics put Nigeria’s inflation at 12 percent. Interest rates banks charge on loans hovers between 18 to 28 percent.
Sanusi said that development in the domestic economy in the past three months highlighted some new pressure points to macroeconomic stability but he cautioned that there could be shocks in the economy.
He said: “The Committee was of the view that shocks to the economy could come from significant fall in the demand for oil, leading to a fall in oil prices and government revenues, weaker exchange rate, rising inflationary pressures and depletion in external reserves.”
Nigeria’s foreign reserves is currently $44.8 billion and Sanusi said it is enough to finance nine months of export.