Tuesday, October 27, 2020

CBN prepares for recession, reduces benchmark lending rate to 11.5%

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The Central Bank of Nigeria has reduced the Monetary Policy Rate by 100 basis points from 12.5 per cent to 11.5 per cent after its two-day Monetary Policy Committee meeting in Abuja.

The 10 members of the committee who were in attendance voted to retain the Cash Reserve Ratio and Liquidity Ratio at 27.5 per cent and 30 percent respectively.

The Central Bank Governor, Godwin Emefiele, disclosed these while presenting the communiqué after the meeting.

He said the committee expressed deep concern on the continued increase in inflation for the twelfth consecutive month as headline inflation (year-on-year) rose to 13.22 per cent in August from 12.82 per cent in July 2020.

Emefiele said the committee stressed the urgent need for a combination of broad-based monetary and fiscal policy measures to curb the rise in inflation and contraction in output growth.