The Central Bank of Nigeria has cut the interest rate by 50 basis points to 26.50 percent from 27 percent.
The CBN Governor, Olayemi Cardoso announced this during its 304th Monetary Policy Committee (MPC) meeting held in Abuja stating that all members of the MPC unanimously agreed upon the decision, maintaining the liquidity ratio at 30 percent.
He said the committee retained the Cash Reserve Ratio (CRR) at 45 percent for commercial banks and 16 percent for merchant banks, while the 75 percent CRR on non-TSA public sector deposits was equally maintained.
Cardoso pointed to falling inflation, stronger banks, and foreign reserves hitting a 13 year high of 50billion dollars giving the economy a solid boost, but warned that pre-election spending could undo progress if not checked.
The CBN uses the MPR, which works as the benchmark interest rate, to manage inflation, macroeconomic stability, and liquidity.
Last November, the MPC retained the Monetary Policy Rate (MPR) at 27.00 percent. The last time the apex bank cut interest rates was in September last year, from 27 percent to 27.50 percent.
