Nigeria cenbank raises interest rate to 13% - CNBC Africa

Nigeria cenbank raises interest rate to 13%

Western Africa

by Reuters 0

Godwin Emefiele, Nigeria's Central Bank Governor said the bank raised the country's interest rates by 100 basis points to 13 per cent.

This is as the bank sought to stem losses to its foreign reserves from defending the local currency.

The central bank moved the band to 160-176 naira to the US dollar, compared with 150-160 naira previously, owing to prolonged naira weakness and high dollar demand.

(READ MORE: Nigeria central bank breaches its forex band ahead of rate meeting)

The naira has taken a beating over the past few months, as falling oil prices have shaken confidence in the assets of Africa's leading energy producer.

Defending the move, the bank's Governor Godwin Emefiele said efforts to defend naira had led to "dwindling foreign reserves" and that a "more flexible exchange rate is the most viable option".

In a further tightening move, the bank hiked the cash reserve ratio for private sector bank deposits to 20 per cent, from 15 per cent previously.

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