Friday, February 3, 2012

Central Bank of Nigeria Holds Policy Rate at 12.00%

The Central Bank of Nigeria maintained its monetary policy interest rate at 12.00%.  The Bank also held the cash reserve ratio at 8%.  Bank Governor, Lamido Sanusi, said: "We are holding our first meeting of 2012 at a time that is possibly a turning point in the economic history of the country.  The dark clouds in the global horizon remain present.  Forecasts are for slower growth rates in the developed world and emerging markets.  The violence and tragic bombings in northern Nigeria continue to pose a source of concern for investors, and efforts are underway to find a lasting solution.  The recent demonstrations by citizens and opposition parties against fuel subsidy removal have also raised temperatures in the political space"

Previously the Nigerian central bank raised the the monetary policy rate by 275 basis points to 12.00% at its October meeting, after increasing by 50 basis points in September rate 75 basis points in July, and increasing it by 50 basis points at its May meeting this year.  Nigeria reported annual headline inflation of 10.3% in December, compared to 10.5% in October, 9.3% in August, down from 9.4% in July, 10.2% in June, 12.4% in May, 11.3% in April, and 12.8% in March, and just above the Bank's inflation target of 10%.  

The Nigerian government doubled the minimum wage to 18,000 Naira recently.  Nigeria reported annual GDP growth of 7.72% in the June quarter, after growing 7.43% in the March quarter, while the Bank had forecast 2011 growth of 7.8%.  
Nigeria's currency, the naira (NGN), has weakened about 6% against the US dollar over the past year, the USDNGN exchange rate last traded around 160.25


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