Nigeria’s central bank (CBN) has slashed the Monetary Policy Rate (MPR) from 14 per cent to 13.50 per cent.
The decision was reached at the Monetary Policy Committee (MPC) meeting of the CBN on Tuesday.
The MPR is the rate the CBN lends to commercial banks. It had remained unchanged at 14 per cent for 30 consecutive months or 15 meetings of the MPC, since July 2016. It moved from 12 per cent in June 2016.
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.