The Monetary Policy Committee (MPC) of the CBN has unanimously retained interest rate benchmark at 13.5 percent. This was announced by the governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele today after the MPC meeting in Abuja.
In consideration of the foregoing, the Committee decided unanimously by a vote of all members present to retain the Monetary Policy Rate (MPR) at 13.5 per cent and to hold all other policy parameters constant. The decision was informed by the conviction of members that key macroeconomic indicators are trending in the right direction.
Consequently, the MPC unanimously voted to: Retain the MPR at 13.5 per cent; Retain the asymmetric corridor at +200/-500 basis points around the MPR; Retain the CRR at 22.5 per cent; and Retain the Liquidity Ratio at 30 per cent.
The Interest Rate benchmark which is also called the Monetary Policy Rate (MPR) is the rate at which CBN loan fund to banks in the country. The MPR is the determinant of interest rates paid on loans by borrowers.
The asymmetric corridor which was also retained at +200/-500 basic points around the MPR. The asymmetric corridor refers to the adjustment limit that could be made to the MPR by commercial banks for the purpose of lending and other banking transactions.
The Cash Reserve Ratio (CRR) refers to the percentage of customers deposit that must be kept with CBN as reserve by banks and at 0% interest rate. While liquidity ratio refer to the percentage of customers’ or banks deposit that must be available to service customers inflow and outflow request for a period of 30 days.