CBN reduces Monetary Policy Rate to 12.5%

Godwin Emefiele

Bowing to pressure occasioned by the harsh economic realities of the coronavirus (COVID-19) pandemic, the Monetary Policy Committee (MPC) of Central Bank of Nigeria on Thursday reduced Monetary Policy Rate (MPR) to 12.5 per cent.

As at March 2020, the apex bank had maintained at 13.5 per cent the MPR, which is the instrument it deploys through the MPC to control interest/lending rates.

The MPC meeting, the second conducted under under COVID-19 protocols, however left other monetary policy parameters unchanged.

The communique read by the CBN Governor, Godwin Emefiele, said the MPC resolved to retain the Liquidity Ratio (LR) at 30 per cent, Cash Reserve Requirement (CRR) at 27.5 per cent and the asymmetric corridor at +200/-500 basis points around the MPR.

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Given the huge dislocations inflicted on the global economy by COVID-19 health crisis, many financial experts have sustained their calls on CBN to reduce interest rates to enable investors and manufacturers access funds at a cheaper rate to mitigate their current financial loses.