Nigeria’s central bank keeps interest rate at 14pct

By Rafiu Ajakaye

LAGOS, Nigeria (AA) – Nigeria's central bank on Tuesday retained its key interest rate at 14 percent, a step the bank's chief, Godwin Emefiele, said was necessary to continue fighting inflation which is now at 17.6, up from 17.1 in July.

“Monetary Policy Committee members voted to maintain the status quo by retaining the monetary policy rate (also called interest rate) at 14 percent,” Emefiele told a news briefing in the capital Abuja after the committee concluded a two-day meeting.

The committee also voted unanimously to retain the cash reserve ratio at 22.5 percent and the liquidity ratio at 30 percent, he said.

The bank's decision conflicted with expectations of Finance Minister Kemi Adeosun who said on Monday the government expected a downward review of the interest rate to help local borrowing and boost the economy, now in recession.

Slashing rates without corresponding fiscal plans may not help the economy, according to the central bank chief.

He called on the government to fast-track implementation of the budget, insisting that its decision to raise interest rates in July had yielded positive reactions from foreign investors and helped to slow down inflation.

According to him, over $1 billion had been invested in the economy “within the last two months”.