City in Nigeria

Nigeria Monetary Policy May 2021

Nigeria: Central Bank stays put in May

At its 24–25 May meeting, the Monetary Policy Committee of the Central Bank of Nigeria stood pat, leaving the monetary policy rate unchanged at 11.50%. It also kept 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%. The vote was unanimous, in contrast to the prior meeting when three members voted to hike the rate.

The Committee’s decision reflected the ongoing balancing act between the need to combat elevated inflation and to continue supporting the economic recovery. The Bank commented on the disruptive nature of price instability on productive capacity and thus the economic recovery, stating that members of the Committee remained “focused towards achieving price stability in the short to medium-term”. However, ultimately the Bank decided to stay on hold as a tighter stance could derail the fragile economic recovery and would influence prices only moderately due to persisting supply-side constraints.

The Bank provided no explicit guidance on future rate movements. On one hand, it noted that inflation was above its 6.00–9.00% target rage, and there was a need to cool price pressures. On the other hand, the Committee stated the potential negative impact of tighter monetary policy on economic activity. Looking ahead, our panelists overall expect the Bank to ease its stance in a bid to shore up economic activity.

The next monetary policy meeting is scheduled for 26–27 July.

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest