THE Monetary Policy Committee of the Central Bank of Nigeria has reduced the Monetary Policy Rate by 100 basis points, from 12.5 per cent to 11.5 per cent.
The Monetary Policy Rate is the rate at which the CBN lends to Deposit Money Banks.
The rate determines what will be charged by banks when giving out loans to their customers.
The CBN Governor, Godwin Emefiele, announced the decision on Tuesday during the Monetary Policy Committee meeting in Abuja.
The decision comes against the backdrop of weak economic growth, rising inflation, near illiquid currency markets, and low capital inflows.
The MPC had, during the last meeting, opted for an accommodative monetary policy to cushion the negative impact of COVID-19 on the country.
The CBN said the move would help Nigerian banks to lend more and increase aggregate production.
It said it had no option than to adopt an expansionary measure to curb the country’s rising inflation.
According to the apex bank boss, the traditional policy monetary rate will not help the rising inflation, while it is considered a supply side policy.
The committee also observed that the cut would help curb the country’s rising unemployment rate.
Details later…
