Tuesday, May 24, 2011

Central Bank of Nigeria Raises Rate 50bps to 8.00%

The Central Bank of Nigeria increased its monetary policy interest rate by 50 basis points to 8.00% from 7.50% previously.  The Bank also increased bank cash reserve requirement by 200bps to 4% from 2%, while the key borrowing and lending rates were both increased by 50bps to 6.00% and 10.00% respectively.  The Bank said "The committee held that it would be prudent to adopt a stance that is consistent with the need to address inflationary expectations associated with the excessive liquidity and pressure on the foreign exchange market,".  Nigeria reported annual headline inflation of 11.3% in April, compared to 12.8% in March, and above the Bank's inflation target of 10%.


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