Nigeria Monetary Policy January 2019


Nigeria: Central Bank stays put in January

January 22, 2019

At its 21–22 January meeting, the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) left the monetary policy rate as well as all other monetary policy parameters unchanged, meeting market expectations. As a result, the policy rate remains at a record-high of 14.00%, with the asymmetric corridor at plus 200 and minus 500 basis points around the monetary policy rate. In addition, the committee left the liquidity ratio unchanged at 30.00% and the cash reserve ratio stable at 22.50%. Notably, all 11 MPC members voted in favor of keeping monetary policy parameters unchanged.

The Bank’s decision was mainly motivated by the persistence of elevated inflationary pressures. Inflation hovered well above the Bank’s target of 6.0%–9.0% throughout 2018 and edged up to 11.4% in December (November: 11.3%) as a result of higher food prices. Furthermore, with growth fragile as of late, the MPC deemed that tightening policy would have adverse effects on activity by increasing the cost of credit, worsening the non-performing loan position of banks and dampening investment.

Looking forward, the Bank struck a broadly neutral tone in its communiqué, stating it would wait for clarity on economic dynamics after the general election is wrapped up. Meanwhile, it noted that pro-inflationary risks to the outlook remain elevated amid increased election-related public spending and continued disruptions in the food supply chain in regions affected by insurgency and herdsmen attacks. Nevertheless, the CBN expects price pressures to ease towards the middle of the year. The next Central Bank meeting is scheduled for 25–26 March.

Nigeria Interest Rate Forecast

FocusEconomics Consensus Forecast panelists expect the monetary policy rate to end 2019 at 13.53%. In 2020, the panel sees the monetary policy rate ending the year at 12.92%.

Author:, Economist

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Nigeria Monetary Policy Chart

Nigeria Monetary Policy January 2019

Note: Monetary policy rate in %.
Source: Central Bank of Nigeria.

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