CBN holds interest rate at 14%

CBN holds interest rate at 14%

The Central Bank of Nigeria said it will hold the benchmark interest rate at 14% as a result of several geopolitical, socio-political tensions as well as the impact of election spending.

Nigeria’s Central Bank said there are concerns that the economy will grow by 2.28% for the year.

The CBN MPC said the outlook for inflation for the period could rise in the first quarter of the year as election spending and disruption to food production rise in insurgent-riddled parts of Nigeria.

The Committee looks at a stable price for oil price which could average at $50 per barrel. The MPC noted the gradual improvement in output growth

The Committee acknowledged the rise in infrastructure spending and its ripple effect in the economy in the medium and long term. The Committee noted the increase in debt levels and warned it could match the 2005 Paris Club level.

The Committee welcomed narrowing in the gap between the parallel market and the official CBN window. The Committee noted that the increase in foreign direct investment into the country despite the tensions created by socio-political tensions.