Nigerian Central Bank leaves interest rate unchanged at 11.5%

The Central Bank of Nigeria (CBN) has retained the benchmark interest rate at 11.5% since the last quarter of 2020 despite the country’s accelerating inflation rate.

The apex bank at the end of its Monetary Policy Committee (MPC) meeting on Monday, announced that it has maintained the status quo, retaining the Monetary Policy Rate (MPR) at 11.5%.

The policy rate is the benchmark interest rate at which the central bank lends to commercial banks. It determines the rate at which banks lend to their customers, and is effectively used by the CBN as a monetary policy tool to control the amount of money in the economy.

Consumer goods inflation rose to 15.7 per cent in February amid fuel scarcity and foreign currency shortage.

Some analysts had projected that the CBN would raise the rates to deal with inflation.

However, at the end of the committee meeting Monday, the CBN governor, Godwin Emefiele, announced that all key policy rates have been held unanimously.

The other parameters that were retained include the cash reserve requirement at 27.5 per cent, liquidity ratio at 30 per cent, and the asymmetric corridor (margin around the MPR) at +100/-700 basis points around the MPR.

The CRR is the funds kept with the CBN as a minimum deposit a commercial bank must hold as reserves, which they cannot lend out to customers.