The monetary policy committee of the Central Bank of Nigeria (CBN) on Tuesday reduced the monetary policy rate by 50 basis points.
With this development, the MPR, which is put at 14% since 2016, was eased to 13.5%.
The CBN governor, Godwin Emefiele who announced the decision in Abuja at the end of Tuesday’s MPC meeting, said there is a need to signal a new direction which would be “pro-growth”.
According to him, the reduction would manage sentiments in the capital flows market.
This is the first time the MPR will be reduced since July 2016.
The MPC, however, held all other key parameters remain unchanged; Cash Reserve Requirement (CRR) remained at 22.5 per cent, while the liquidity ratio was kept at 30 per cent.
Mr Emefiele further explained that the cut in the rates was to support the nation’s feeble economic growth at this time.
He added that the decision was aimed at reducing the rate of unemployment and diversifying the country’s economy.