All twelve members of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) have voted unanimously not to devalue the Naira.
The move has come as a disappointment to foreign investors who had been in support of a devaluation of the currency.
The Monetary Policy Committee held the policy rate at 11 percent after lowering it from a record 13 percent in November.
“The current episode of lower oil prices is expected to remain over a very long period,” the governor said. “Consequently, it is imperative to brace up for a longer period of low government revenues from oil sources which will necessitate hard and uncomfortable choices.”
CBN governor Godwin Emefiele said after the MPC meeting that interest rates would instead be lowered to ease liquidity in the economy.
“They’re living in denial,” Tosin Osunkoya, head of trading at Rand Merchant Bank Nigeria Ltd., said in an interview on CNBC Africa, predicting the currency will weaken to 315 to 320 per dollar on the parallel market. “Something has to give. People were expecting some measure of devaluation.”