The Central Bank of Nigeria (CBN) has reduced the country’s benchmark interest rate by 50 basis points to 26.50 per cent from 27 per cent.
The decision was announced on Tuesday at the end of the apex bank’s 304th Monetary Policy Committee (MPC) meeting held in Abuja. The Monetary Policy Rate (MPR), which serves as a benchmark for lending rates in the banking sector, is a key tool used by the CBN to control inflation and stabilise the economy.
By lowering the rate, the CBN is expected to ease borrowing costs, encourage investment, and support economic growth, especially for businesses that rely on credit to expand operations.
Reacting to the development, a Professor of Monetary Economics and former Head of the Department of Economics at the University of Port Harcourt, Professor Peter Mede, described the rate cut as a strategic move aimed at stimulating economic activities.
According to him, the reduction is designed to boost liquidity in the financial system, encourage spending, and support productive sectors of the economy. He noted that while interest rate cuts typically spur growth, they can also help moderate inflation when combined with other sound monetary and fiscal policies.
Professor Mede added that the decision comes with several benefits, including improved access to credit for small and medium-scale enterprises, enhanced consumer spending, and renewed investor confidence in the nation’s economic direction.
He, however, stressed the need for complementary fiscal measures and structural reforms to ensure that the anticipated gains translate into sustainable economic growth and price stability.
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