No Cut in Interest Rate Soon –CBN

The Central Bank of Nigeria (CBN) yesterday foreclosed the possibility of reducing the prevailing 12% interest rate.

The CBN Governor, Sanusi Lamido Sanusi, said in Paris, France, that the bank was more likely to tighten monetary policy than ease it in the months ahead.

The Monetary Policy Rate (MPR) is the benchmark rate by which the CBN determines interest rate. The Cash Reserve Requirement (CRR) is a portion of banks’ deposit kept by banks with the CBN.

“We’re likely to remain where we are but if we’re going to move at all, we’re more likely to tighten than to ease. I would advise against precipitate easing only to turn around after a few months and tighten,” Bloomberg quoted Mr. Sanusi as saying.

At the September 24 Monetary Policy Committee (MPC) meeting, the CBN left both its MPR and CRR for banks unchanged at 12%. It also retained the CRR for public sector deposits at 50%.

Mr. Sanusi said inflation was under control, adding that the naira has held up well relative to other emerging market currencies.