By Annmarie Hordern and Rene Vollgraaff
Central bank governor says lower rates may only come in 2020
Inflation ‘sticky’ when it gets close to 11%, Emefiele says
Nigeria’s central bank wants to see inflation at 9% or below before considering cutting its key rate, and that will likely only happen next next year, according to Governor Godwin Emefiele.
“How soon do I see interest rates coming down? I’m not seeing that coming this year,” Emefiele said in an interview with Bloomberg TV in London on Tuesday. “During the course of 2020 we may be able to see that, but I can’t see that until we begin to see the numbers showing inflation is trending downward.”
The central bank held the monetary policy rate at 13.5% last week for the third straight meeting after surprising the market in March with the first cut since 2015. While inflation in Africa’s largest oil producer has slowed from as high as 18.7% in January 2017 to 11% in August, it’s been outside the target band of 6% to 9% for more than four years.
“Unfortunately it’s been sticky coming downwards as soon as it hit about 11%,” Emefiele said. “The Monetary Policy Committee would love to see it at about 9% before beginning to aggressively thinking about easing.”
— With assistance by Ruth Olurounbi, Alonso Soto, and Anthony Osae-Brown