Nigeria’s Central Bank said it will not tinker with the benchmark interest rate which has been retained by the apex bank at 14%.
The CBN said only two of the eight monetary policy committee members voted to cut the interest rate. Nigeria has been enmeshed in its first economic recession in over 20 years.
The CBN also retained cash reserve ratio at 22.5%. This is expected to tame Nigeria’s double digit inflation which has started falling since February of this year.
Earlier last week, most analysts had agreed that the CBN will not tinker with the rate given the slower fall in June’s inflation data as released by the National Bureau of Statistics.
The data is less encouraging when the food price index is looked at. The sub index is at 19.91% up from 19.27% in May. Nigerians keep paying more for food, a pointer to the fact that life is still much tougher for many Nigerians who live below USD2 per day.
Nigeria entered recession in the second quarter of last year after the country’s gross domestic product fell for the second time consecutively.
Oil is Nigeria’s top revenue source, the country announced two weeks ago that it will join OPEC production cuts to further stabilise price to the region of USD50 per barrel.