Presenting his debut MPC decisions after taking over from the deposed Sanusi Lamido Sanusi in June, Godwin Emefiele announced that the country’s interest rate would remain at 12 per cent.
(WATCH VIDEO: Nigerian central bank leaves interest rate at 12%)
He further noted that the Monetary Policy Committee (MPC) also resolved to return the liquidity ratio at 30 per cent, public sector cash reserve requirement at 75 per cent and the private sector reserve requirement ratio at 15 per cent.
Emefiele noted that the inflation was currently below target and its return to the long run trend could take a while due to the slopes of economic recovery.
“Inflation is expected to remain subdued in 2014 and 2015 partly reflecting the significant output gaps in the developed economies, weaker domestic demand in developing and emerging economies and sliding commodities prices especially in fuel and food in the advanced economies,” said Emefiele.
“The likely depreciation in currencies, domestic demand pressure and capacity constrains could pose upside risks to inflation in the emerging markets economies,” he added.
Emefiele explained that the stance of the monetary policy committee could diverge across regions over the medium term on account of variations in risks and other challenges confronting various economies.
The continent’s largest economy has been seeing a surge in economic growth contribution from other sectors besides oil and gas.
In his Monetary Policy Review, Emefiele stated that sectors such as industry, trade, agriculture and services had contributed just above six per cent according to the latest figures.
“The oil sector continues to record improvements in performance with its growth rate rising from minus nine in the fourth and first quarter of 2014,” he said.
In a move likely to demonstrate the human side of the new governor, Emefiele said, the policy direction of inflation, exchange rate and interest rates must be seen, not only in the context of price and financial stability but also in enhancing lives of Nigerians.