CBN Pegs Lending Rate At 12%

The Monetary Policy Committee of Central Bank of Nigeria after their first meeting of 2012 in Abuja Monday, resolved to leave the key lending rate unchanged at 12%.

Commenting on the global economic situation in a press release on the CBN’s website, the committee raised an alarm on the slowdown of the economies of Nigeria’s major trading partners including China, India, Brazil, US, Uk and Germany. As a panacea to the disturbing trend the CBN has recommended an increase in domestic production to offset the potential shocks.

According to the statement, “The Committee felt that in the light of the expected deceleration in the economies of the country’s major trading partners, and the absence of adequate commitment of most advanced economies to effectively address  the fiscal imbalances and to reform their financial systems,  there would be  continued pressure on  Nigeria’s external sector in 2012.  The anticipated slack in external demand would, in the view of the Committee, have to be offset by generating the needed domestic demand. “

“In the Committee’s view, the opportunity to build on the robust non-oil growth with further investments in infrastructure and manufacturing and processing activities should be utilized in order to mitigate  any  negative impacts  from the  likely external shocks during the year.”