The Monetary Policy Committee (MPC) of Central Bank of Nigeria on Thursday reduced the Monetary Policy Rate (MPR) to 12.5 per cent, from 13.5 per cent.
The MPR is the interest rate at which the central bank lends to commercial banks. It ultimately affects the rates at which individuals and businesses can source loans from commercial banks as such loan rates cannot be lower than the MPR.
The reduction was announced after the MPC meeting by the Governor of the Central Bank of Nigeria, Godwin Emefiele.
The MPR is the instrument used by the Central Bank of Nigeria to control interest/ lending rates.
While delivering the communique, Mr Emefiele said other monetary policy parameters remained unchanged.
He said the MPC resolved to retain the Liquidity Ratio at 30 per cent and the Cash Reserve Requirement (CRR) at 27.5 per cent.
Similarly, he said, the MPC retained the asymmetric corridor at +200/-500 basis points around the MPR. Many Nigerians had called for a slash of the MPR as the nation's economy suffers from the impact of the coronavirus pandemic.