By Chioma Obinagwam
Nigeria’s central monetary authority, the Central Bank of Nigeria (CBN) has reduced the Monetary Policy Rate (MPR) from 12.5 percent to 11.5 percent- a decision reached at the 275th meeting of the Monetary Policy Committee (MPC) held on Tuesday.
Also, information sighted by Confiance News on the official Twitter handle of the apex bank, showed that it adjusted its Asymmetric Window from +200/-500 to +100 and -700 basis points around the MPR.
MPR, also known as the benchmark lending rate, is the interest rate at which CBN lends to the commercial banks.
On the other hand, Asymmetric Window (Corridor) is a tool used to increase the flexibility of monetary policy and provides for the ability to make timely responses to external finance or risk sentiment shocks.
However, an Asymmetric Corridor of interests rates around the MPR at +100 and -700 basis points implies that the rate on the standing lending facility (SLF) will remain at 100 basis points above the MPR, while the rate on the standing deposit facility (SDF) will be 700 basis points below the MPR.
It also said that it retained Cash Reserve Ratio (CRR) at 27.50 percent and liquidity ratio at 30 per cent.