The Monetary Policy Rate (MPR) has been reduced by the Central Bank of Nigeria (CBN) , from 12.5 per cent to 11.5 per cent as part of measures to sustain its economic recovery efforts and to arrest rising inflation.
This is ,even as the Apex Bank has projected that the country could enter into recession in the third quarter, while there would be growth in the fourth quarter of 2020 or first quarter of 2021.
The CBN Governor, Mr Godwin Emefiele, who made the revelation , while presenting the communiqué of the 275th Monetary Policy Committee (MPC) meeting on Tuesday ,said that the committee also retained Cash Reserve Ratio (CRR) at 27.5 per cent.
He said that recent inflationary pressures were not driven by monetary policies rather as a result of structural policies.
Emefiele disclosed that air and road transportation, accommodation, food services were worst hit by the lockdown occasioned by the COVID-19 pandemic and called for more aggressive funding of those sectors to engender economic growth.
According to him, “Management was directed to ensure that deposit money banks respond to lowering of interest on deposit rate by aggressively lowering cost of credit to borrowers.Sectors like air and road transportation, entertainment and accommodation, food services and education were most adversely affected by the lockdown.
The Central Bank Governor suggested that more efforts be put in place to continue to provide relief and funding to those sub sectors to catalyse growth, while he called on commercial banks to respond to the reduction of deposit rate, by also reducing interest rates on borrowing to encourage borrowing for investments.