Central Bank of Nigeria (CBN) on Monday announced its decision to keep benchmark rates unchanged, its governor said, a day earlier than scheduled to avoid falling into limbo because several monetary policy committee (MPC) members are retiring on Tuesday, according to a Reuters report. 

Three rate setters voted to raise rates by 25 basis points and one for a 50 basis point hike. Six others voted to hold rates, marking the 10th decision to hold rates steady since the bank cut them in September 2020.

Governor Godwin Emefiele said the decision was to boost its fragile economy and counter potential headwinds from the Ukraine war but that members felt the need to signal a tightening stance to curb inflation.

Russia's invasion of Ukraine last month has added to volatility in financial markets, sending commodity prices higher and affecting logistics, potentially derailing the economic recovery from Covid-19 in Nigeria and elsewhere.

A CBN official said "six members of the MPC are retiring tomorrow, they did not want to be caught in the web of illegality."

A standoff in 2018 between Nigeria's presidency and parliament over confirmation of new members of the CBN’s MPC threatened the bank's independence after the bank could not form a quorum for meetings.

Nigeria faces double-digit inflation and low revenues which has hampered its ability to stimulate the economy.

The economy recorded its fastest growth in seven years in 2021 despite a slight slowdown in the fourth quarter due to oil production problems, but growth is still fragile.

CBN wants to boost growth and curb inflation at the same time but faces limited policy options.

"With real rates negative for some time... a forceful monetary policy response to the threat of higher inflation will remain difficult," said Razia Khan, chief economist for Africa and the Middle East at Standard Chartered.