Thursday April 9, 08:04 AM
Nigeria Central Bank cuts benchmark lending rate
ABUJA (AFP) - Nigeria's Central Bank has cut its benchmark lending rate to eight percent from 9.75 percent and announced measures aimed at boosting liquidity in the market, a statement said.
The Bank's Monetary Policy Committee (MPC) also decided to reduce the liquidity ratio to 25 percent from 30 percent and the Cash Reserve Requirement to one percent from two percent, both with effect from April 14, 2009.
The Cash Reserve Requirement is the proportion of shareholders' funds it is mandatory for banks to keep with the Central Bank.
"The MPC observed the relative tight monetary conditions in the economy and hence the need for monetary easing," Central Bank Governor Soludo said.
He said the committee noted an upward swing of the inflation rate from 14 percent in January 2009 to 14.6 percent in February.
Soludo said the committee "recognised that external forces have had a severe impact on the Nigerian economy through trade, finance and confidence channels.
"The committee however noted that the severity of the impact could be alleviated by undertaking appropriate economic and financial policies, taking into account the evolving international economic situation."
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