Nigeria fails to devalue its currency, retains interest rates at 11%

Nigeria will not devalue its currency, ignoring calls from different quarters for the naira to be allowed to find its true value. The currency exchanged at N300 to a dollar at the parallel market on Monday while the official exchange rate remained at N197.

Financial markets waited earnestly for the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) to hold its meeting which ended today but nothing changed about the naira. Foreign exchange restrictions which have been hurting businesses will remain.

CBN Governor Godwin Emefiele told reporters on Tuesday in Abuja, that the MPC held the policy rate at 11 percent after lowering it from a record 13 percent in November. Lower interest rates make it cheaper to borrow, easing liquidity.

“The current episode of lower oil prices is expected to remain over a very long period. 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,” Emefiele said.

 

* The title of this story has been edited. The initial title erroneously read that interest rates were lowered. We regret any effect the misleading title might have had.