Nigerian central bank retains interest rate at 13.5%

CBN

The monetary policy committee, MPC, of the Central Bank of Nigeria, CBN, has retained interest rates at 13.5%.

The CBN said in a statement that MPC arrived at the decision as a result of inflation that persists ‘outside the upper end of the band.

Yesterday, the National Bureau of Statistics, NBS, said in its gross domestic product, GDP, figures that the economy rose by 2.01% in the first quarter of the year compared to 2.38% achieved during the last quarter of 2018.

Despite the seasonality of lower first-quarter GDP output, the first quarter of 2019 was an improvement over the first quarter of 2018.

An economist at Bloomberg, Mark Bohlund said: “A higher oil price and financial inflows on the back of the local listing of telecoms firm MTN Group Ltd. should make the central bank more at ease about the naira’s peg to the U.S. dollar, laying the ground for cutting rates further during the remainder of the year. Governor Godwin Emefiele appears to have achieved a consensus for a gradual reduction in the policy rate, rather than the 100-basis point moves previously favored by the central bank. We expect the policy rate to be reduced to 13% by the end of the year.”