(Bloomberg) -- Nigeria’s central bank became the second major African regulator to unexpectedly cut its benchmark rate after Ghana’s did so in January, but its reason was different.
The Central Bank of Nigeria’s Monetary Policy Committee cut its key rate by 50 basis points to 13.5 percent Tuesday, a move that wasn’t predicted by any economists in a Bloomberg survey, all of whom forecast a hold. The same happened on Jan. 28 in Ghana, when the MPC there reduced the rate by 100 basis points to 16 percent. Every survey participant expected that number to stay put.
While inflation in Ghana, the world’s second-biggest cocoa producer, has been within the target range since April last year and its MPC has hinted at lowering the band, price growth in Nigeria has been well outside the upper end of the desired spectrum since 2015.
Nigeria’s cut comes as the central bank of Africa’s most populous nation and top oil producer wants to explore steps to help boost growth in an economy that is still recovering from a 2016 contraction, Governor Godwin Emefiele said.
The fact that Nigeria’s fixed-income market has attracted billions of dollars in the past month, thanks to an improved appetite for emerging-markets assets, has given the central bank the confidence it needed to ease policy for the first time in 3 1/2 years.