Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Nigeria May Hold Rate to Support Naira Amid Calls for Cut

Central Bank of Nigeria Governor Lamido Sanusi
Lamido Sanusi, governor of the Central Bank of Nigeria. Photographer: Jason Alden/Bloomberg

The Central Bank of Nigeria will probably keep its benchmark lending rate unchanged at a record high even as Finance Minister Ngozi Okonjo-Iweala calls for lower borrowing costs to support the economy.

The Monetary Policy Committee, led by Governor Lamido Sanusi, will hold its policy rate at 12 percent for a 10th consecutive meeting today, according to all 11 economists surveyed by Bloomberg News. The announcement will be made at a press conference that begins at 2 p.m. in the capital, Abuja.

“Their primary concern is the currency,” Alan Cameron, an economist at CSL Stockbrokers Ltd. in London, said by phone. “Their goal is to maintain high interest rates until they can find a substitute for portfolio inflows.”

The naira has dropped 1.3 percent against the dollar since the beginning of the year, adding to price pressures in Africa’s largest oil producer. Inflation accelerated to 9.1 percent in April from 8.6 percent the previous month.

Okonjo-Iweala said yesterday lower interest rates will help support the economy.

“We would be very grateful if we saw an easing of the interest rate, a little bit, in order to also help more economic activity,” Okonjo-Iweala said. “Knowing the central bank governor and perhaps the tone and trend of the Monetary Policy Committee, I’m sure that they may end up maintaining tight monetary stance.”

Portfolio Inflows

While Sanusi has said he supports keeping the benchmark rate unchanged, three MPC members voted for a reduction in the March 19 meeting, up from two in January. The bank’s target is to keep inflation below 10 percent and Sanusi said on March 24 the inflation rate will probably remain between 9 and 11 percent this year.

The naira was trading at 158.2 per dollar as of 9:32 a.m. in Lagos, the commercial capital.

Keeping interest rates unchanged may help support the naira as foreign investment in stocks and bonds slowed this year. Lower oil prices have undermined the economy’s outlook, curbing investors’ appetite for local assets.

“They need to send a signal to the market that the fundamentals for carry trade, which are high interest rates, aren’t going to go away anytime soon,” said Cameron.

The yield on the 16.39 percent government bond maturing in January 2022 rose 15 basis points, or 0.15 percentage point, to 11.44 percent yesterday from the last MPC meeting on March 19, according to data compiled by Bloomberg. The Nigeria Stock Exchange All-Share Index has advanced 31.1 percent this year, according to data compiled by Bloomberg.

Foreign-currency reserves declined 0.8 percent to $48.5 billion on May 17 from May 2, after rising by a third in the previous year, according to central bank data.

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.