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Breaking: CBN reduces benchmark lending rate to 11.5 per cent

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The Central Bank of Nigeria on Tuesday reduced the Monetary Policy Rate (MPR) from 12.5 per cent to 11.5 per cent after the two-day Monetary Policy Committee Meeting in Abuja.

MPR is the interest rate at which CBN lends to the commercial banks. It is the benchmark against which other lending rates in the economy are pegged and is usually used as an instrument to moderate inflation in the economy.

The committee also voted to retain the Cash Reserve Ratio (CRR) and Liquidity Ratio (LR) at 27.5 per cent and 30 per cent respectively.

CRR is a specified minimum fraction of the total deposits of customers, which commercial banks have to hold as reserves either in cash or as deposits with the central bank while Liquidity ratios are financial metrics used to determine a debtor’s ability to pay off current debt obligations without raising external capital.

The Central Bank Governor, Godwin Emefiele, disclosed this while presenting the communiqué after the meeting.

Full reports later…

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