Interest Rate in Nigeria
Nigeria - Interest Rate
Central Bank stays put in January
At its first meeting of the new year on 25–26 January, the Monetary Policy Committee (MPC) of the Central Bank of Nigeria unanimously decided to leave the monetary policy rate unchanged at 11.50%. Moreover, the MPC 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 30.0%.
In deliberating the decision, the MPC noted the economy was stuck in stagflation, with simultaneously intensifying inflationary pressures and contracting economic output. As such, there was merit for both tightening and loosening its stance. However, as a change in the stance could worsen price pressures and further weaken the currency, or limit economic activity, the MPC opted to hold its fire. Regarding the domestic economy, the Committee noted that activity faced headwinds in the final quarter of last year amid a resurgence in Covid-19 cases, currency weakness and greater production costs. That said, the MPC noted an improvement in output at the beginning of this year and expects the outlook for the domestic economy to improve over the medium term. It also projects inflationary pressures to ease.
The Bank struck a relatively neutral tone in its press release, leaving the door open to both a rate cut and hike. The decision to stand pat, however, allows for a continued wait-and-see approach as the effects of previous cuts become more visible.
The next monetary policy meeting is scheduled for 22–33 March.
FocusEconomics Consensus Forecast panelists project the monetary policy rate to end 2021 at 11.89%. In 2022, the panel sees the monetary policy rate ending the year at 12.90%.
Nigeria - Interest Rate Data
|Policy Interest Rate (%)||11.00||14.00||14.00||14.00||13.50|
5 years of economic forecasts for more than 30 economic indicators.
Nigeria Interest Rate Chart
Source: Central Bank of Nigeria
|Bond Yield||11.10||0.0 %||Dec 31|
|Exchange Rate||306.5||3.08 %||Jan 01|
|Stock Market||0.1||0.0 %||Jan 07|
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April 7, 2021
Operating conditions in Nigeria’s private sector economy improved for the ninth straight month in March and at a quicker pace than in the prior month, with the Stanbic IBTC Bank Nigeria Purchasing Managers’ Index (PMI) rising to 52.9 at the close of the first quarter from 52.0 in February.
March 19, 2021
Consumer prices rose 1.54% month-on-month in February, up from January’s 1.49% increase.
February 22, 2021
The economy returned to growth, albeit marginally, in the final quarter of last year, with GDP expanding 0.1% year-on-year.
February 16, 2021
Consumer prices rose 1.49% month-on-month in January, down from December’s 1.61% increase.
February 3, 2021
Operating conditions in Nigeria’s private sector economy continued to improve in January, albeit at a six-month soft pace as the Stanbic IBTC Bank Nigeria Purchasing Managers’ Index (PMI) dropped to 50.7 from 51.8 in December.