Central Bank of Nigeria Slashes Monetary Policy Rate

April 9, 2009

Nigeria’s benchmark central bank rate was cut by 175 basis points to 8.0%.  Monetary officials also reduced the liquidity ration to 25% from 30% and the cash reserve requirement to 1% from 2%.  This was the second easing of policy.  Last September 18th, officials cut their interest rate by 50 bps from 10.25% where such had stood since early June, and they also halved the cash reserve requirement from 4% and reduced the liquidity ratio from 40%.

Today’s move by the central bank was controversial.  Nigeria’s currency, the naira, had depreciated over 20% since November, the Nigerian credit rating was downgraded last month by S&P, and CPI inflation accelerated to 14.6% in February, well above the central bank rate.  A statement from the central bank cited tight liquidity, a slowdown of growth for this major oil exporter, softer credit growth, and higher market interest rates to explain the easing of policy.

Copyright 2009 Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.


One Response to “Central Bank of Nigeria Slashes Monetary Policy Rate”

  1. thomas sabo ring says:

    I’ve been exploring for a bit for any high quality articles or blog posts in this sort of house . Exploring in Yahoo I ultimately stumbled upon this web site. Studying this info So i’m happy to show that I’ve an incredibly good uncanny feeling I discovered exactly what I needed. I so much without a doubt will make certain to don?t omit this site and provides it a look regularly.