The Central Bank of Nigeria on Thursday reduced its monetary policy rate to 12.5 percent as part of efforts to combat the economic effects of the coronavirus pandemic.
The previous rate was 13.50 percent. However, the bank retained its Cash Reserve Ratio (CRR) at 27.5 percent and Liquidity Ratio (LR) at 30 percent.
MPR is the interest rate at which CBN lends to the commercial banks and also the benchmark against which other lending rates in the economy are pegged. A reduction in the MPR rate tends to make lending cheaper and helps to further stimulate the economy.
CBN Governor, Godwin Emefiele, announced the reduction during a Monetary Policy Council briefing on Thursday. Seven members voted to cut the MPR by 100 basis points, while two members voted for a 150bps rate cut, with one member electing for a 200bps rate cut, the Governor said.
