Nigeria's central bank keeps key lending rate at 11%

Nigeria’s central bank has kept the benchmark interest rate at 11 percent, its governor Godwin Emefiele said on Tuesday.

Emefiele said that the 12 member Monetary Policy Committee (MPC) unanimously agreed to keep the rate unchanged amid calls to devalue the naira which has come under pressure due to plummeting oil prices.

However, the bank has opted to adopt foreign currency controls that are hurting businesses and worsening the outlook for growth in Africa’s largest economy.

Investors have seen a devaluation for Africa’s largest economy as long overdue but the central bank has effectively fixed the naira at 197 to 199 per dollar since March, while in the parallel market the naira trades up to 305 to the dollar.

“The current episode of lower oil prices is expected to remain over a very long period,” the 54-year-old governor said.

“Consequently, it is imperative to brace up for a longer period of low government revenues from oil sources which will necessitate hard and uncomfortable choices,” he added.

Inflation, which accelerated to a three-year high of 9.6 percent in December, has been above the central bank’s target of 6 percent to 9 percent since May last year.

President Muhammadu Buhari, who took office last year, has backed the central bank’s restrictive foreign currency policy.