The CBN Reduces Interest Rate from 14% to 13.5%

The CBN Reduces Interest Rate from 14% to 13.5%

The CBN Governor, Mr Godwin Emefiele, announced the decision of the MPC ( Monetary Policy Committee ) of the Central Bank of Nigeria on the reduction of  the MPR ( Monetary Policy Rate ) , also known as the benchmark or main interest rate, from 14% to 13.5% at end of a two-day meeting in Abuja.

He further explained that six members out of 11 who attended the meeting agreed to reduce the current monetary policy stance .

The MPR, which is used to determine bank lending rates and the cost of credit for borrowers, had been held at a record high of 14% since July 2016 when it was hiked by 200 basis points from 12%.
TreeHe said while the MPR was reduced to 13.5%, the committee decided to retain the Cash Reserves Ratio at 22.5%, the liquidity ratio at 30% ; and the asymmetric window at +200 and -500 basis points around the MPR.

He said, “The MPC decided by a vote of six out of 11 members to reduce the  MPR ( Monetary Policy Rate ) by 50 basis points, that is 0.5%.

Two members voted to reduce the rate by 0.25%, while one member voted to reduce it by 1%.  Two members, however, voted to hold the MPR at its current level.”