Abuja - Nigeria’s central bank kept the benchmark interest rate unchanged at a record high, extending its tight policy stance for almost three years to support the currency and keep inflation under control.
The rate was maintained at 12 percent, Governor Godwin Emefiele told reporters today in the capital, Abuja, matching the forecasts of all 13 economists surveyed by Bloomberg.
The MPC was split in its decision with half of the 12 members voting to retain the monetary policy stance, while the rest wanted to raise commercial banks’ cash reserve ratio.
Emefiele, 52, took control of the central bank in June with a mandate to keep inflation, which accelerated to 8.5 percent in August, within a 6 percent to 9 percent target band.
While he has said he favours lowering borrowing costs, the threat of rising government spending before February elections may give policy makers reason to hold off on rate cuts.
“Inflation is on a clear uptrend, even if the pace of the rise has been more subdued than we expected so far,” Razia Khan, head of Africa research at Standard Chartered in London, said in an e-mail before today’s decision.
The cash reserve ratio for public-sector funds was retained at 75 percent and kept at 15 percent for private-sector funds.
The rate-setting Monetary Policy Committee last adjusted the benchmark rate in October 2011, when then-Governor Lamido Sanusi increased it by 275 basis points. - Bloomberg News