CBN reduces benchmark lending rate by 50bps to 27%

The monetary policy committee (MPC) of the Central Bank of Nigeria held its September meeting today with all the 12 members present. The highlight of the deliberations was a reduction by 50 basis points in the benchmark lending rate otherwise known as the monetary policy rate (MPR) from 27.50% to 27%. The MPR indicates the direction of monetary policy in Nigeria. It reflects how the CBN intends to manage inflation, economic growth, and liquidity in the financial system. When the CBN adjusts the MPR, it’s signaling whether it wants to: Loosen monetary policy (encourage borrowing, investment, and economic growth). Tighten monetary policy (reduce inflation, slow down borrowing/spending)

Other major decisions reached by the committee are:

• The MPC reduced Monetary Policy Rate by 50bps to 27.00% from 27.50%.
• The asymmetric corridor around the MPR was adjusted to +250bps /-250bps from +500bps/-100bps
• Adjusted Cash Reserve Ratio for Deposit Money Banks to 45.00% from 50.00%.
• CRR for Merchant Banks was retained at 16.00%.
• Introduced 75% CRR on Non-TSA Public Sector deposit.
• Liquidity ratio retained at 30.00%.