Friday 23 November 2018


Written by: Lukman Otunuga, FXTM Research Analyst
It should be no surprise that the Central Bank of Nigeria (CBN) has left the benchmark interest rate unchanged at 14% in November. The combination of Oil price uncertainty, falling reserves, lingering inflationary pressures, an appreciating Dollar and other external risks have forced the CBN to maintain the status quo on monetary policy.

Although a rate cut during the first quarter of 2019 remains a possibility, some key prerequisites must be achieved. Inflationary pressures need to moderate further while economic growth must display further signs of recovery.

Although the nation remains on a quest to diversify from Oil reliance, a fair chunk of government revenue is still realised from Oil sales. With Oil trading at depressed levels, its impacts are likely to be felt on the economy and Naira exchange. If the economic conditions brighten before the presidential elections next year, the CBN still has a chance to cut rates in a bid to simulate growth.

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