Nigeria's central bank holds rate at 14% amid worsening economic recession

Nigeria’s central bank left its key lending rate unchanged at 14%, as the country battles its worst economic recession in decades.

Central bank governor Godwin Emefiele said that the decision to hold the rate and keep cash reserve ratios for commercial banks at 22.5%, was unanimously agreed by all 10 members of the Monetary Policy Committee (MPC).

“Considering the importance of price to stability and being mindful of the limitations of monetary policy in influencing output and employment under the conditions of stagflation, committee decided unanimously to retain current stance of monetary policy thus keeping MPR at 14 percent alongside all other policy parameters,” he added.

The committee urged the Nigerian government to assess the level of its indebtedness to domestic economic agents and develop a framework for securitising the debts in order to settle its outstanding domestic contractual obligations which cuts across all sectors of the economy.

The rate decision comes a day after data showed the recession was deepening, with Nigeria’s GDP contracting in the third quarter by 2.24 percent year-on-year.

A majority of analysts polled had predicted that the bank would hold the rate.

Nigeria’s economy has been battered since the global oil crash in mid-2014. Prices for oil which is the country’s main export remain depressed while inflation accelerated to more than 11-year high of 18.3 % in October.