CBN cuts benchmark interest rate to 11.5%

By Philip Clement

The Monetary Policy Committee of the Central Bank of Nigeria (CBN) has reduced Monetary Policy Rates (MPR) by 100 basis points from 12.5 per cent to 11.5 per cent.

CBN governor, Godwin Emiefele made this known while addressing the media on the outcome of the two-day meeting of the Committee in Abuja.

Before now, experts have advocated for a reduction on interest rates to attract more investments in the country amidst the slowing of the economy caused by the Covid-19 pandemic.

In another development, the Central Bank governor said that through the implementation of the Loan To Deposit Ratio Policy, credit provided by banks to the economy had increased by N3.77trn from N15.57trn in May last year to N19.3trn as of the end of August this year.

Daily Times reports that the CBN had July 3, 2019, directed banks to maintain a minimum LDR of 60 per cent by September 30, 2019.

The LDR, which is being reviewed quarterly to improve lending to the real sector, was 58.5 per cent as of the end of May.

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It has now been raised to 65 per cent for the last quarter of last year. Emefiele said through the policy, the banks have been able to provide funds for key sectors of the economy.

For instance, he said during the period, the manufacturing sector got N866bn, consumer credit N527.6bn, oil and gas N477bn, agriculture N287bn and construction N270bn. 12.5%.