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Business News of Tuesday, 24 March 2020

Source: MyNigeria

BREAKING: CBN retains MPR at 13.5%

entral Bank Governor, Godwin Emefiele entral Bank Governor, Godwin Emefiele

The Central Bank of Nigeria has retained the Monetary Policy Rate at 13.5%

This announcement was made by the Central Bank Governor, Godwin Emefiele at the Monetary Policy Committee live press briefing that held seconds ago.

Responding to the coronavirus pandemic that has dragged the bottom line of businesses to a grinding halt, Emefiele said:

"The coronavirus pandemic is a public health crisis that will undermine the economy unless adequate methods are taken to curtail it."

Emefiele, however, noted that increasing the MPR has been a source of concern to the committee, as an increment could encourage Deposit Money Banks to increase their lending rates while a decrease would not make them reduce their lending rates. He stressed the aim of the Apex Bank which was bent at driving interest rates a little lower during this trying period.

He noted that time was required for all CBN policies to work, which is ultimately geared at stimulating aggregate supply and demand.

"The MPC is taking actions to allow time for the measures to permeate the economy. An increase in the MPR could be counterproductive," the CBN Governor said.

"Time is required for the CRR to be manifest. It was increased just recently. An increase in MPR could be taken by DMBs as a means to increase lending rates. A reduction will not make the DMB reduce their lending rates either. We are bent on making the DMBs to restrict lending rates," he explained.