The monetary policy committee of the Central Bank of Nigeria (CBN) has retained the monetary policy rate at 14%.

While reading out the committee’s decision to journalists in Abuja on Thursday, Godwin Emefiele, CBN governor, said the committee thought that the drop in inflation is seasonal and not sustainable.

Emefiele said the upside risk to inflation still remains. All 11 members of the committee voted to hold rates.

The committee also retained the cash reserves ratio and liquidity ratio at 22.5% and 30% respectively, while the asymmetric window was left at +200 and -500 basis points around the MPR.

“Committee noted the benign performance of inflation, a drop in headline inflation was driven by food inflation which moderated, core inflation, however, came up marginally,” he said.

“The committee noted that the moderation in inflation was largely seasonally driven and was therefore unsustainable as prices were expected to pick towards the end of the year.

“The MPC observed that the near-time upside risk to inflation remains.”

According to Emefiele, the committee advised that the Anchors Borrower Programme be extended to fish and palm oil production.

He said committee members were of the opinion that tightening will dampen investor confidence while loosening will rapidly reverse the stability being witnessed in the exchange rate regime and depress the capital market.

In a reverse move, South Africa raised interest rates to 6.75%, its first increase in two years.