CBN cuts key interest rate to 26.5% as inflation eases
story by Martha Gwary
The Central Bank of Nigeria (CBN) has reduced the Monetary Policy Rate (MPR) by 50 basis points, lowering it from 27 per cent to 26.5 per cent in a move aimed at consolidating the easing inflationary trend.
The Governor of the apex bank, Olayemi Cardoso, announced the decision while briefing journalists at the end of the 304th meeting of the Monetary Policy Committee (MPC) held in Abuja on Tuesday.
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According to him, the Committee resolved to ease the benchmark interest rate by 50 basis points to 26.5 per cent following a careful assessment of prevailing economic conditions and the inflation outlook.
Cardoso stated that the MPC also voted to retain key prudential parameters. The Cash Reserve Ratio (CRR) for deposit money banks was maintained at 45 per cent, while that of merchant banks remains at 16 per cent. The liquidity ratio was left unchanged, including the 75 per cent requirement for non-Treasury Single Account (non-TSA) public sector deposits.
He explained that the Committee’s decision was based on a balanced evaluation of risks to the economic outlook, noting that disinflationary pressures are expected to persist as a result of earlier tight monetary measures and improved food supply conditions.
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The Governor further observed that inflation has continued to moderate on a year-on-year basis, marking the 11th consecutive month of deceleration.
A total of 11 members of the Committee attended the meeting.
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