Central Bank Keeps Benchmark Rate at 12.5 Percent

The Central Bank of Nigeria led Monetary Policy Committee on Monday left the nation’s benchmark interest rate unchanged at 12.5 percent.

Mr. Godwin Emefiele, the Governor, CBN, disclosed this on Monday, adding that members of the monetary policy committee wanted to evaluate the effect of the 100-basis-points rate cut in the previous meeting on the economy.

According to the governor, eight of the ten committee members agreed to maintain the current rate, while two members voted for an additional cut.

The committee had reduced the benchmark rate by 100 basis points from 13.5 percent to 12.5 percent in May, the largest reduction in rate cut in the last five years.

“The committee was mindful of the cut in policy rate at the last MPC (committee) meeting and the need to allow time for its effect to permeate the economy,” said Emefiele.

The reduction in the rate was done to stimulate growth from within following the negative impacts of COVID-19 on the nation’s economy.

Also, the monetary policy committee had increased Cash Reserve Ratio (CRR) to 27.5 percent while maintaining a loan-to-deposit ratio of 65 percent to continue to force deposit money banks to loan more money to the real sector.

Below is Godwin Emefiele’s speech after the rate decision.