Nigeria Cuts Lending Rate to 13.5%
London, March 26, 2019 (AltAfrica)-The Central Bank of Nigeria (CBN) Tuesday resolved to reduce the Monetary Policy Rate (MPR), otherwise known as interest rate, by 50 basis points to 13.5 per cent from 14 per cent.
The MPR is the rate at which the CBN lends to commercial banks and often determines the cost of borrowing in the economy.
CBN Governor, Mr. Godwin Emefiele, anmouced this at the end of the two-day Monetary Policy Committee (MPC) meeting in Abuja.
The cut in the MPR is the first time since the CBN decided in July 2016 to pursue a tight monetary policy to bring stability to the financial market and engender growth in the country’s economy.
In announcing the committee’s decision at the end of its 122nd meeting in Abuja, the CBN governor, Godwin Emefiele, said the committee, however, resolved to retain other parameters unchanged.
He said Cash Reserve Requirement (CRR) was left at 22.5 per cent, while the liquidity ratio was kept at 30 per cent.
The CRR is the funds kept with the CBN as a minimum deposit a commercial bank must hold as reserves, rather than lend out.
Prior to the meeting, most analysts expected the MPC to retain the rates unchanged.