Nigeria: Central Bank of Nigeria maintains key rates unchanged at July's meeting
July 24, 2015
At its 23–24 July monetary policy meeting, the members of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) voted 8 to 4 to keep the monetary policy rate unchanged at 13.00% with a corridor of plus/minus 200 basis points around the midpoint. The decision was in line with market analysts’ expectations. Moreover, the Bank unanimously decided to retain the cash reserve requirement (CRR) at 31%.
In its July assessment of the economy, the CBN stated that domestic growth is slowing due to low oil prices, scarcity of fuel products and mild improvements in electricity supply. The Bank also noted that the global economy is growing unevenly. While growth prospects for the Euro area and the United States remain promising, developing economies are performing poorly. Moreover, the CBN stressed the need to intensify initiatives to diversify the Nigerian economy away from oil.
Regarding price developments, the Bank was concerned about the constant increase in inflation, which partially reflects transient factors such as scarcity of petroleum products, poor electricity supply, increased demand for transportation and food, the 2015 elections and the ensuing Easter and Sallah celebrations. The next monetary policy meeting is scheduled for 21–22 September.