Nigeria central bank keeps benchmark interest rate at 14pc

LAGOS: Nigeria's central bank kept its benchmark interest rate at 14 percent on Tuesday, its governor said, hours after the statistics office said Africa's biggest economy contracted in the first quarter.

This was in line with expectations in a Reuters poll.

Governor Godwin Emefiele said the bank's Monetary Policy Committee (MPC) had voted to retain the headline rate.

"In consideration of the challenges weighing down the domestic economy and the uncertainties in the global environment, the committee decided by a unanimous vote of eight members in attendance to retain the MPR [Monetary Policy Rate] at 14 percent," he said.

The statistics office on Tuesday published data showing that Africa's biggest economy, in its second year of a recession caused by low oil prices, contracted in the first quarter by 0.52 percent.

The central bank's decision to hold the main interest rate was predicted by economists polled by Reuters last week.

The bank also kept its cash reserve ratios for commercial banks at 22.5 percent.

Emefiele also told reporters the bank wanted to end the spread between the black market and official foreign exchange rates, adding that the recent rise of the naira versus the dollar showed that the central bank's policies were working.

"We would prefer a convergence that will go southward rather than northward, but the fact that we have seen the convergence (going) southward gives us a lot of hope that things are working in the right direction," he added, refusing to give an exchange rate target.