The Central Bank of Nigeria's Monetary Policy Committee (MPC) has lowered the Monetary Policy Rate (MPR) by 50 basis points to 27 per cent, in a move aimed at easing borrowing costs and supporting economic recovery.
CBN Governor, Olayemi Cardoso, said the decision followed five consecutive months of slowing inflation, with further declines projected through 2025. He noted that the adjustment is designed to balance growth with price stability while creating a more business-friendly environment.
To strengthen monetary transmission, the MPC revised the standing facilities corridor to +250 to -250 basis points around the MPR. At the same time, it raised the Cash Reserve Requirement (CRR) for commercial banks from 45 per cent, while retaining 16 per cent for merchant banks.
In a new liquidity control measure, the MPC introduced a 75 per cent CRR on non-Treasury Single Account (TSA) public sector deposits. The liquidity ratio remains unchanged at 30 per cent.\
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According to Cardoso, the rate cut should improve credit availability, particularly for businesses seeking expansion capital, while the stricter CRR framework will ensure better liquidity management in the banking system.
"The committee's decision reflects optimism that the economy is on a recovery path," Cardoso said. "We expect lower inflation, stronger financial system stability, and improved access to funding for businesses."
Analysts say the move offers relief for small and medium-sized enterprises (SMEs), which have been burdened by high borrowing costs, while also tightening controls to prevent excess liquidity from fueling inflationary pressures.
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