Amid looming recession, CBN reduces monetary policy rate To 11.5%

As the country braces up to an impending recession in the third quarter, the Central Bank of Nigeria on Tuesday cut the Monetary Policy Rate from 12.5 per cent to 11.5 per cent.

Central Bank Governor Godwin Emefiele made the disclosure while presenting a communiqué after the two-day Monetary Policy Committee Meeting in Abuja.

The MPC, however, opted to retain the Cash Reserve Ratio at 27.5 per cent and the liquidity ratio at 30 per cent.

He said, “In the face of declining economic growth and rise in inflation, committee faced a difficult set of policy choices requiring trade-offs and sequencing.”

According to the apex bank governor, reducing the MPR will put pressure on the deposit money banks to lower cost of credit and the cheaper credit will improve demand, stimulate production, reduce unemployment and support the recovery of output growth.