ABUJA, Sept 20 (Reuters) – Nigeria’s central bank held its benchmark interest rate at 13.5%, its governor Godwin Emefiele said on Friday.
Most analysts polled by Reuters had predicted the central bank would ease in September, though Emefiele has previously said the bank would maintain its tight monetary stance in 2019.
Africa’s largest economy and top crude oil exporter emerged from its first recession in 25 years in 2017. Growth remains fragile but higher oil prices and recent debt sales have helped the country to accrue billions of dollars in foreign reserves.
Emefiele, announcing the monetary policy committee’s decision in the capital Abuja, said tightening credit could constrain fragile economic growth while loosening it could allow inflation to rise.
He said holding rates steady would allow the bank to appraise the impact of current policies, such as changes to the loan to deposit ratios at banks, before determining what shift, if any, was needed.
Inflation fell to a nearly four-year low of 11.02% in August but the price index remains outside the bank’s single-digit target.
The central bank in March cut its benchmark interest rate to 13.5% from 14% in a surprise move as part of an attempt to stimulate growth and signal a new direction. It was the first rate cut since November 2015. (Reporting by Chijioke Ohuocha; Additional reporting by Libby George and Alexis Akwagyiram in Lagos; Writing by Alexis Akwagyiram Editing by Angus MacSwan)