MPC slashes interest rate to 12.5%

Must Read

List of Access Bank Sort Codes & Branches (with addresses) in Nigeria

The sort code is a number which usually identifies both the bank and the branch where an account is...

Here is the list of Providus Bank Branches in Lagos

A little over two years after it was granted a commercial banking license with regional authorization by the Central...

List of latest Ponzi schemes in Nigeria

These are the latest and past Ponzi scams and shady investment products that Nigerians are putting their monies into. What...

The Central Bank of Nigeria (CBN) held its bi-monthly Monetary Policy Committee meeting today May 28, 2020. Against the 2-day traditional timeline for the event, the meeting was cut short to a day.

Faced with the decision to hold or cut specific metrics, the committee unanimously voted to cut Monetary Policy Rate by 100bps to 12.50% while leaving all other monetary policy metrics unchanged.

  • Monetary Policy Rate (MPR) at 12.50%;
  • The asymmetric corridor around the MPR at +200/-500bps;
  • Cash Reserves Ratio (CRR) at 27.5%; and
  • Liquidity Ratio (LR) at 30.0%

We believe the monetary policy committee is towing a path aimed at reducing the potential impact of COVID-19 on overall output growth.

This accommodative policy is in line with the global dovish stance which may not necessarily be ideal for Nigeria’s situation given the breakdown in the transmission mechanism on the monetary policy front.

- Advertisement -

It is curious that the committee did not provide much guidance on the foreign exchange front as that remains a key pressure point for the Nigerian economy at this time.

In all, we think the impact of this move on the fixed income market would be minimal as the market has not been anchored around the benchmark rate for quite a while. Whether this would be enough to ward off negative growth this year remains to be seen.


The MPC, however, advised the fiscal authorities to maintain its core spending plan, improve on tax generation and work towards the gradual reopening of the economy. The MPC also highlighted the need for a public-private partnership to fund infrastructural development in the country.

The Monetary authority also noted the need to provide cheaper credit to the real sector amid relative stability in the banking sector where Non-Performing Loans have fallen to 6.58% as at April 2020 from 10.95% as at April 2019.

- Advertisement -

Finally, the MPC stressed on the need for continued interventions in the Manufacturing, Agricultural and Health Sectors.

- Advertisement -
MPC slashes interest rate to 12.5%MPC slashes interest rate to 12.5%


Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

MPC slashes interest rate to 12.5%MPC slashes interest rate to 12.5%

Latest News

Reasons Behind the Success of Three of Gaming’s Biggest Brands

The gaming industry is huge. In 2019, gamers spent $152.1 billion on buying titles and paying for in-game items....

Dangote Sugar acquires Savannah Sugar for Market Expansion

In a bid to enhance production capacity and further increase its market share, shareholders of Dangote Sugar Refinery Plc (DSR) have given the nod...

Nigeria’s Domestic Debt Service increased by 295% in Q1 2020 – NBS

Domestic debt service increased by 295% from Q4 2019 to ₦609 billion in Q1 2020. FGN bonds made up 80% of the domestic debt...

PZ Cussons delists from GSE to improve business operations

The Ghana Stock Exchange (GSE) has approved the delisting of a major consumer goods company, PZ Cussons Ghana from the stock market, following the...

The power of women in the 21st Century: The Zinox Group example By Dr. Abiona Iwajowa

"There's something so special about a woman who dominates in a man's world. It takes a certain grace, strength, intelligence, fearlessness, and the nerve...
- Advertisement -
BrandsPur Weekly Cartoons
- Advertisement -MPC slashes interest rate to 12.5%MPC slashes interest rate to 12.5%