March 23, 2019

CBN cuts benchmark interest rate from 13% to 11%

CBN cuts benchmark interest rate from 13% to 11%

Nigeria’s central bank reduced its benchmark interest rate for the first time in six years, diverging from its counterparts in most of Africa that have tightened monetary policy in the face of weakening currencies.

The key rate was cut to 11 percent from a record high of 13 percent, Governor Godwin Emefiele told reporters on Tuesday in Abuja, the capital. That was a bigger reduction than forecast by seven of the 20 economists surveyed by Bloomberg, while the rest predicted the rate would stay unchanged.

Monetary policy in Nigeria is becoming harder to predict as the central bank turns to unconventional tools to protect its currency and boost economic growth. Emefiele has imposed foreign-exchange restrictions in Nigeria, Africa’s biggest crude producer, to keep the naira stable amid a plunge in oil revenue. “What we’ve decided to do at this meeting is that we must stimulate growth,” Emefiele told reporters after the decision. “We don’t have a choice.” Read more

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