Pussyfooting away from a deadly recession, Nigeria’s Central Bank said it will leave the headline interest rate unchanged at 14%.
This is divergent given the views of analysts who had thought that the CBN Monetary Policy Committee, MPC would hold rates despite a stronger gross domestic product, GDP, and slower inflation figures from the national data office.
Governor of the CBN, Godwin Emefiele, spoke on behalf of the committee that:
“The committee noted that at 14 percent the policy rate was tight enough to rein in current inflationary pressures,” he said.
“Notwithstanding the general improvement in macroeconomic conditions, the committee noted the generally slow pace of moderation of food inflation and also took note of the potential risk from rising global inflation to domestic prices,” he said.
One of the key reasons for holding rates is the fact that inflationary pressures are still stronger looking at broad indices that make up the data. Food inflation is still far higher than the headline inflation.