(Bloomberg) --
Nigeria's central bank held its benchmark rate for a fourth straight meeting, saying the surge in inflation to a 17-month high is just temporary.
All 11 members of the Monetary Policy Committee who attended the meeting voted to keep the rate at 13.5%, Governor Godwin Emefiele told reporters Tuesday in the capital, Abuja. The decision was in line with the forecast of all six economists surveyed by Bloomberg.
Key Insights
- Nigeria's inflation rate rose to 11.6% in October due to a spike in food prices following the closure of land borders to halt smuggling of rice, a staple in Africa's most-populous nation. Emefiele said the effects on price growth are “reactionary and temporary,” and that the MPC supports the move because the current cost of the closure is lower than the medium-term benefits.
- The rate has now been above the central bank's target range of 6% to 9% for almost four years. In September, he said rate cuts would be considered only when inflation slows to the top end of the band.
- Economic growth quickened to 2.3% in the three months through September. While that's the fastest expansion in three quarters, it still well below the annual average of more than 6% in the decade prior to the 2016 contraction. The bank reduced its forecast for economic growth this year to 2.2% compared with 2.28% at its previous meeting.
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--With assistance from Hilton Shone, Pauline Bax and Gordon Bell.
To contact the reporters on this story: Alonso Soto in Abuja at asoto54@bloomberg.net;Elisha Bala-Gbogbo in Abuja at ebalagbogbo@bloomberg.net
To contact the editors responsible for this story: Anthony Osae-Brown at aosaebrown2@bloomberg.net, Rene Vollgraaff, Ana Monteiro
©2019 Bloomberg L.P.
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