Nigeria’s central bank cut its benchmark lending rate on Tuesday by 100 basis points to 11.5% in an attempt to stimulate growth in Africa’s largest economy, its governor Godwin Emefiele said.
Emefiele said six of the 10 members of the monetary policy committee voted for the cut, one for a 50 point reduction and three for holding the rate.
Loosening monetary policy “would complement the bank’s commitment to sustaining the trajectory of the economic recovery and reduce the negative impact of COVID-19”, he told a news conference.
In May, the bank unexpectedly cut the rate by 100 basis points to 12.5%, the largest reduction since 2015. The bank’s monetary policy committee voted to hold the rate at its last meeting in July.
Nigeria’s economy, badly hit by the pandemic, contracted 6.1% in the second quarter and now faces possible recession in the third quarter. Low oil prices have also taken their toll on the continent’s top producer, which relies on crude sales for 90% of foreign exchange earnings.
The government expects the economy to contract by as much as 8.9% this year. Nigeria’s economy has seen low growth since 2017 when it emerged from its first recession in 25 years. (Reporting by Alexis Akwagyiram; Additional reporting by Chijioke Ohuocha Editing by Gareth Jones and Andrew Cawthorne)
– Reuters