Nigeria holds interest rate at 12%

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“The committee unanimously voted to maintain the current stance of monetary policy. In addition, more members voted for an asymmetric corridor around the MPR,” said acting Central Bank of Nigeria Governor Sarah Alade at the MPC meeting on Tuesday.

She explained that the committee was dedicated to maintaining a stable currency and low inflation.

“The committee has also expressed concern over the eroded fiscal buffers which has exposed the economy to vulnerability,” said Alade.

“The committee therefore in joined management of the bank to continue to monitor development in the fiscal space with a view to taking the appropriate monetary action.”

This is Nigeria’s first MPC meeting since the rebasing of the country’s gross domestic product (GDP) in April 2014, officially giving way to Nigeria becoming Africa’s largest economy.

(READ MORE: A closer look at Nigeria’s GDP rebasing)

With regards to domestic financial development for 2014, Alade stated that Nigeria’s real GDP growth remains robust.

Nigeria’s oil sector remains the country’s largest economic driver at 7.77 per cent, while other sectors such as agriculture contributes towards GDP at 0.43 per cent, industry at 1.28 per cent, trade 1.54 per cent and the services sector at 3.89 per cent.

She added that inflation has remained within the indicative benchmark target range of six and nine per cent for the first four months of 2014. Headline inflation however increased from 7.8 per cent in March 2014 to 7.9 per cent in April 2014 on a year-on-year basis.

Food inflation also increased slightly from 9.3 per cent in March to 9.4 per cent in April 2014, while core inflation rose from 6.6 per cent in January 2014 to 7.5 per cent in April 2014.

“The committee noted that headline inflation has remained within single digits in the last 16 months and chairs its commitment to sustain price stability defined by the bank indicative benchmark rate,” said Alade.

The naira, which had previously taken a beating in February 2014 after President Goodluck Jonathan suspended the central bank’s governor Sanusi Lamido Sanusi, has responded well to Alade’s tightening measures.

(READ MORE: The aftermath of Sanusi’s suspension)