The Monetary Policy Committee of the Central Bank of Nigeria (CBN) has reduced the Monetary Policy Rate (benchmark interest rate) from 13 per cent to 11 per cent.
Speaking at an interactive session with Journalists after the MPC meeting explained that the decisions were arrived at by a vote of eight to two.
The Governor explained that the committee also voted to reduce the Cash Reserve Requirement from the current 25 per cent to 20 per cent as well as changed the symmetric corridor of 200 basis points around the MPR to an asymmetric corridor of +200 basis points and -700 basis points, around the MPR.
The Governor said: “The MPC noted the fragility of the domestic macroeconomic environment; reflected partly in low output growth, soft oil prices, low credit to the high employment elastic sectors of the economy, and sustained inflationary pressure, which, however, softened moderately in October.
“The MPC was particularly concerned that the previous liquidity injections embarked upon through lowering of the CRR in the last MPC has not transmitted significantly to improved credit delivery to key growth and employment in sensitive sectors of the economy.
“Rather, more credit was to sectors with low employment elasticity. While noting the imperative of complementary fiscal policies to augment monetary policy under the circumstance, the monetary policy must remain bold in charting the desired course that will stimulate sustainable output growth in Nigeria.”