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Nigerian central bank keeps key rate on hold

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Nigerian central bank keeps key rate on hold

Nigeria's central bank on May 22 kept its monetary policy rate on hold at 14.0% as the bank monitors the economy's performance in the second quarter to gain clarity on the direction of monetary policy.

The Central Bank of Nigeria's committee also maintained the cash reserve ratio at 22.5%, the liquidity ratio at 30.0%, and the asymmetric corridor at positive 200 basis points and negative 500 basis points around the monetary policy rate.

"The Committee, while arguing for a hold, observed that the downside risk to growth and upside risk to inflation appears balanced as growth is improving while inflation is moderating," the central bank said.

Nigeria's real GDP growth for the fourth quarter of 2017 was revised up to 2.11% from 1.92%, and it saw growth of 1.95% in the first quarter, the bank noted. Headline inflation declined for the 15th straight month to 12.48% in April from 13.34% in March.

"Maintaining the current policy stance would sustain gradual improvements in both indices," the central bank said.