Nigeria's central bank left its key interest rate unchanged to support an economy that expanded at a slower pace than expected in the second quarter.
All 10 members of the monetary policy committee who attended its two-day meeting voted to keep the rate at 11.5% for the sixth straight meeting, Governor Godwin Emefiele said Friday in a virtual briefing from the capital, Abuja. That matched the forecast of all eight economists in a Bloomberg survey.
“A hold stance would allow the current recovery of output growth and decline in inflation to continue smoothly and gradually moving the economy to a sustainable path before an adjustment is made to the stance of policy,” Emefiele said.
Read more: African Central Banks Seen Holding Rates on GDP Growth Concerns
Emefiele has previously said the MPC can only shift to fighting inflation once the economy's recovery from last year's coronavirus-induced contraction gains momentum.
While the economy grew 5.01% in in the three months through June from a year earlier, the biggest such expansion since the fourth quarter of 2021, it undershot economists' forecasts. The MPC now sees growth averaging 2.86% in 2021, down from a forecast of 3.15% in July and compared with the International Monetary Fund's 2.5% prediction.
Inflation, which has exceeded the 9% top of the central bank's target band for more than six years, slowed to a seven-month low of 17% in August. The central bank sees price growth continuing to moderate, Emefiele said.
“Inflation is expected to decelerate more aggressively as we move toward the end of the year” as the nation is now entering the harvest period, he said.
Stronger economic growth and a slowdown in inflation are vital to reducing poverty in Africa's largest economy, where population growth has outstripped that of gross domestic product since 2015 and more than 40% of Nigerians live below the nation's poverty line of 137,430 naira ($333) per year.
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