MPC: CBN Retains Benchmark Lending Rate at 11.5%

*Keeps CRR at 27.5%, LR at 30%

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has again resolved to retain the Monetary Policy Rate (MPR) at 11.5 per cent.

The policy rate is the benchmark interest rate at which the central bank lends to commercial banks. It determines the rate at which banks lend to their customers, and is effectively used by the CBN as a monetary policy tool to control the amount of money in the economy.

The rate has remained at 11.5 per cent since the last quarter of 2020 despite persistent inflation in the country. Consumer goods inflation rose to 15.7 per cent in February amid fuel scarcity and foreign currency shortage.

At the end of the committee meeting on Monday, the CBN governor, Godwin Emefiele, announced that all key policy rates have been held unanimously.

The other parameters that were retained include the Cash Reserve Requirement (CRR) at 27.5 per cent, Liquidity Ratio at 30 per cent, and the asymmetric corridor (margin around the MPR) at +100/-700 basis points around the MPR.

The CRR is the funds kept with the CBN as a minimum deposit a commercial bank must hold as reserves, which they cannot lend out to customers.