Nigeria Leaves Key Interest Rate Unchanged

Nigeria's central bank maintained its benchmark interest rate unchanged at 6.25% to allow a previous rate hike to filter through the economy, reports said on Tuesday citing the country's central bank chief.

Lamido Sanusi was quoted as saying that the decision was a close one, with policymakers voting six to four for the key rate to be held, but that the move was necessary due to demand pressure on the foreign exchange market.

The borrowing rate was raised one percentage point to 4.25%, while the lending rate was maintained at 8.25%, he said.

The Central Bank of Nigeria had raised its benchmark interest rate by a quarter percentage point in its prior meeting.

Inflation in Nigeria came in at 13.4% in October, down slightly from 13.6% in the prior month. The central bank holds an inflation target of less than 10%.

Speaking to reporters at the conclusion of the monetary policy meeting in the capital Abuja, Sanusi said members had voted to retain the interest rate "given the need to retain flexibility and allow the effects of the previous rate increase to work through the system."

The central bank chief also forecast Nigeria's economy to grow 8.3% in the December quarter, compared to 7.9% in the September quarter. Full-year growth was seen at 7.9%.

Oil-rich Nigeria is one of the world's fastest growing economies and is Africa's third largest after South Africa and Egypt.

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