Nigeria Leaves Monetary Policy Rate Unchanged at 11.5%

Gov. Emefiele

The Central Bank of Nigeria left its monetary policy rate unchanged at 11.5% during its last meeting for the year.

All other parameters were mantained. The Cash Reserve Ratio was retained at 27.5% and Liquidity ratio was kept at 30%.

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The decision reflected the priority to further stimulate a contracting economy despite quickening inflation, which has remained above the Bank’s target range for over five years now.

Nigeria slipped into its second recession in four years in the third quarter of 2020, as a result of Covid-19 and low oil prices.

Governor Emefiele said the bank was “cautiously optimistic” of positive growth in the fourth quarter of the year and expected Nigeria to exit recession in the first quarter of next year.

Policymakers noted that inflation continued to climb to an over two-year high of 14.23% in October, as a result of structural policies, hike in petrol prices and #EndSARS protests.

The inflation target is still above CBN’s target range of 6% to 9%.