CBN cuts interest rate to 12.5%, lowest in four years

The Monetary Policy Committee of the Central Bank of Nigeria has reduced the Monetary Policy Rate by 100 basis points to 12.5 percent, the lowest in nearly four years.

The CBN Governor, Mr Godwin Emefiele, at the end of the MPC meeting on Thursday, said the committee also decided to retain the Cash Reserves Ratio at 27.5 percent and the liquidity ratio at 30 percent.

The central bank had held the MPR at 13.5 percent since March 2019 when it was reduced by 50 basis points from 14 percent.

In July 2016, the CBN raised the MPR to a record high of 14 percent from 12 percent as the country took a beating from the crash in crude oil prices which began in mid-2014.

The MPR is the benchmark rate used to determine bank lending rates and the cost of credit for borrowers.