According to the governor of the CBN, Godwin Emefiele, the interest rates would instead be lowered to ease liquidity in the economy. “The current episode of lower oil prices is expected to remain over a very long period.
He also stated that “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.” The naira will continue to exchange at the official window — almost entirely funded by the CBN — for N197-N199, but parallel market rates are expected to jump well above N300 as a result of the announcement.
President Muhammadu Buhari has argued against devaluing the naira, maintaining that it would only amount to importing inflation since Nigeria is not an exporting country.
Local and international financial experts have been arguing for the currency to be allowed to depreciate to a realistic level so that the economy can attract the needed inflow of foreign investment. The MPC also voted to retain the benchmark rate at 11% in order to support the economy which has been hit by falling oil prices.