Nigeria Monetary Policy July 2021


Nigeria: Central Bank stays put in July

July 28, 2021

The Monetary Policy Committee of the Central Bank of Nigeria stood pat at its 26–27 July meeting, leaving the monetary policy rate unchanged at 11.50% in a unanimous vote. The Bank also left the asymmetric corridor at plus 100 and minus 700 basis points around the monetary policy rate, the cash reserve ratio at 27.50% and the liquidity ratio at 30.00%.

In deliberating its decision, the Committee noted inflation has begun to trend downwards while it retained “cautious optimism” regarding the economy, with output continuing to grow in Q1. That said, the Committee stated a need to facilitate a more rapid decline in inflation, while at the same time fostering stronger economic growth. All in all, the Committee viewed that there was neither room to tighten the Bank’s stance, as this would harm economic activity, nor to loosen its stance, as this would negatively impact inflation and thus discourage investment.

The Bank gave no explicit forward guidance on rate movements, but stated that “a hold stance will enable the continued permeation of current policy measures in supporting the recorded growth recovery and macroeconomic stability”. As such, the majority of panelists see the Bank holding rates at 11.50% through to year-end, although some pencil in a hike.

The next monetary policy meeting is scheduled for 20–21 September.

FocusEconomics Consensus Forecast panelists project the monetary policy rate to end 2021 at 11.85%. In 2022, the panel sees the monetary policy rate ending the year at 12.50%.

Author:, Economist

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Nigeria Monetary Policy Chart

Nigeria Monetary Policy July 2021

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

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