Mixed reactions as CBN cuts interest rate - Punch .

The Monetary Policy Committee of the Central Bank of Nigeria on Tuesday reduced the Monetary Policy Rate (benchmark interest rate) from 13 per cent to 11 per cent.

The decision was announced by the CBN Governor, Mr. Godwin Emefiele, while addressing journalists shortly after the MPC meeting held at the central bank’s headquarters in Abuja.

This is the first time in about six years that the committee will be reducing the MPR, which is the anchor rate at which the CBN lends money to Deposit Money Banks.

The committee, according to the governor, also voted to reduce the Cash Reserve Requirement from the current 25 per cent to 20 per cent as well as changed the symmetric corridor of 200 basis points around the MPR to an asymmetric corridor of +200 basis points and -700 basis points, around the MPR.
Explaining how the decisions were arrived at, the governor explained that the MPC, by a vote of eight to two, reduced the MPR from 13 per cent to 11 per cent, while two members voted for a retention of the rate at 13 per cent.
For the CRR, he said seven members voted to reduce it from 25 per cent to 20 per cent, while three elected to hold the rate.
In addition, Emefiele said eight members voted for an asymmetric corridor of +2/-7 per cent, while two voted to retain the symmetric corridor of +/-2 per cent around the MPR.

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