After months of appeals by economic experts and investors in the money market, the Central Bank of Nigeria (CBN) has finally reduced the Monetary Policy Rate (MPR) to 11.5 per cent from 12.5 per cent.
The development represents a major fallout from the two-day Monetary Policy Committee (MPC) meeting of the regulatory bank which ended in Abuja, Tuesday.
Addressing newsmen on decisions taken by the meeting, Governor of the CBN, Mr Godwin Emefiele, said members of the committee voted to have the benchmark interest rate sliced by one per cent or 100 basis points to 11.5 per cent.
The implication of this move, based on the recent directive to banks in the country, is that the interest rate paid by lenders for savings deposit will be dropped to 1.15 per cent per annum from 1.25 per cent per annum it was before the announcement today.
“To put this in perspective, for N100,000 kept in the bank by a customer, he/she will get an interest of N95.83 per month if he/she does less than four withdrawals during the month,” Emefiele said.
The MPC also adjusted the asymmetric corridor from +200/-500 around the MPR, but retained the Cash Reserve Ratio (CRR) at 27.5 per cent and the liquidity ratio at 30 per cent.
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