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MPC slashes interest rate to 12.5%

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The Central Bank of Nigeria’s Monetary Policy Committee (MPC) has reduced Monetary Policy Rate (MPR) to 12.5 per cent.

At the second MPC meeting held under COVID-19 protocols, CBN Governor, Godwin Emefiele, while delivering the communique, said the MPR has been reduced to 12% but other monetary policy parameters remained unchanged.

Emefiele said the MPC resolved to retain the Liquidity Ratio 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.

The MPR is the instrument used by the Central Bank of Nigeria through the MPC to control interest/ lending rates.

The reduction in the MPR comes weeks after Asiwaju Bola Ahmed Tinubu called on the CBN to reduce interest rates so that investors and manufacturers can access fund at a cheaper rate.

The much-awaited May 2020 Monetary Policy Commission (MPC) meeting was earlier scheduled for Monday and Tuesday, May 25 and 26, 2020, but it was shifted to Thursday, May 28, 2020, because Monday and Tuesday, May 25 and 26, 2020, were declared public holidays to celebrate Eid-el Fitr.

Prior to the meeting, CBN assured that it had put in place all necessary machinery for the meeting to hold for only one day on account of the on-going COVID-19 national lockdown and to align the meeting with extant rules of the Presidential Task Force (PTF) on COVID-19 and advisories from other relevant agencies.

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