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Nigeria retains benchmark interest rate at 11 pct

Xinhua, January 27, 2016 Adjust font size:

The Central Bank of Nigeria (CBN) on Tuesday retained at 11 percent the Monetary Policy Rate (MPR), the benchmark interest rate used to measure lending to commercial banks.

CBN Governor Godwin Emefiele made the announcement at a news conference here on the outcome of the Monetary Policy Committee (MPC) meeting.

The governor said the apex bank had no immediate plan to further devalue the Naira.

Emefiele told reporters that though for 14 months, oil prices at the international market had continued to fall, the Nigerian government had no immediate intention to further devalue the Naira.

The Naira was devalued in November 2014, by 22 percent from 155 Naira to 168 Naira to a dollar at the interbank rate.

"We don't have any immediate plan to devalue the Naira. However, we are already working on different scenarios; the models are being worked on," the apex bank chief told reporters.

"We try as much as possible to look at scenarios under different crude prices and we will continue to discuss at management and monetary policy committee level," he added.

"We will try as much as possible to share our thoughts with the fiscal authorities to harmonize our positions to ensure that notwithstanding the drop in crude prices, we can continue to run government and do business," he said.

According to him, the decision to retain the current monetary policies by members of MPC was unanimous, noting that Cash Reserve Requirement (CRR) was retained at 20 percent, Liquidity Ratio (LP) at 30 percent and the asymmetric corridor of +200 basis points and -700 basis points around the MPR.

This is the second time the apex bank will be retaining the MPR, CRR, Liquidity Ratio and the asymmetric corridor.

Emefiele said the decision to retain the rate was taken to ensure that the objective of easing lending to the real sector of the economy was achieved.

He said while the apex bank had in November taken steps to encourage banks to lend to the real sector of the economy, the impact of that decision was yet to be felt. Endit