Nigeria’s Central Bank retains lending rate at 11.5%, targets economic recovery

By Chioma Obinagwam

The Monetary Policy Committee (MPC) of Nigeria’s apex monetary authority– the Central Bank of Nigeria (CBN) has retained the Monetary Policy Rate (MPR) at 11.5 percent.

This decision was reached at the 276th Meeting of the MPC which held in Abuja on Tuesday.

MPR is the interest rate at which CBN lends to the commercial banks. It is also the benchmark lending rates for other banks in the economy.

According to information gathered by Confiance News from the official Twitter handle of the bank, it also retained the Cash Reserve Ratio (CRR) and Liquidity Ratio at 27.5 percent and 30 percent respectively.

Confiance News recalls that at the last MPC meeting in September, the committee reduced the MPR from 12.5 percent to 11.5 percent.

The MPC also maintained the Asymmetric Window at +100 and -700 basis points around the MPR.

The bank also said it would continue to stimulate the economy through its intervention programmes, even as Nigeria’s economy slid into a second recession in four years, having shrank for two consecutive quarters according to a recent report released by the National Bureau of Statistics (NBS) on the Gross Domestic Product (GDP).

The report showed that the GDP declined by 3.62 percent for the third quarter (Q3) ended September 2020.

Confiance News recalls that the GDP also decreased by 6.10 percent (year-on-year) in real terms in the second quarter of 2020.

Although the decline in the GDP is not unconnected with the shutdown of economic activities in the second quarter due to the COVID-19 pandemic, the CBN Governor has maintained that the bank would continue to embark on measures to stimulate economic growth.

“CBN will attack inflation from the supply side through low interest rates #Emefiele reiterates need to diversify Nigeria’s economy to grow its foreign revenue base #CBN Governor assures that the Bank will continue to stimulate the economy to ensure growth,” the bank disclosed.

So far, the CBN has about 37 interventions aimed to stimulate the economy.

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