Nigeria’s central bank unexpectedly raised the benchmark interest rate from 11 to 12 percent on Tuesday.
The bank also raised the cash reserve ratio (CRR) for commercial banks to 22.5 percent from 20 percent and it held the liquidity ratio at 30 percent, Governor Godwin Emefiele said.
Emefiele also told reporters after a meeting of its monetary policy committee the central bank would keep the naira foreign exchange rate stable despite a sharp fall of the currency on the parallel market due to shortages of dollars.
Nigeria, Africa’s biggest economy and the continent’s top oil producer, is going through its worst economic crisis in years due to the sharp drop in crude prices. The oil sector accounts for around 70 percent of national income.
“The MPC voted to raise MPR by 100 basis points from 11 percent to 12 percent, raise the CRR by 250 basis points from 20 percent to 22.5 percent, retain liquidity ratio at 30 percent,” said Emefiele.
He cited the state of the economy and rising inflation, which is above the central bank’s target band of 6 to 9 percent.
Eighteen of 20 analysts polled by Reuters in the run up to the meeting had expected the central bank to hold interest rates steady at 11 percent.
The governor also urged the swift passing of the 2016 budget, which was tabled by the upper house of parliament earlier on Tuesday.