The Central Bank of Nigeria has reduced the Monetary Policy rate to 12.5 percent from the previous 13.5 percent.
The Governor of the Bank, Mr. Godwin Emefiele announced this today at the end of the Monetary Policy Committee Meeting in Abuja.
Mr. Emefiele said the committee came to the decision in view of the need to stimulate demand and enhance quick recovery.
The Monetary Policy Rate is the benchmark interest rate which guides all other rates in the financial system.
However, the Cash Reserve Ratio which is the volume of funds which commercial banks are mandated to keep with the apex bank was left unchanged at twenty seven point five percent.
Meanwhile, the Governor of the CBN said Nigeria might not slide into an economic recession as previously anticipated. He said this new optimism was driven by new macro-economic realities which include improving crude oil prices at the international market as well as the interventions by monetary and fiscal authorities.
He cited the example of the fifty billion naira which the CBN provided to revitalize ailing SMEs and households out of which about five billion naira has been disbursed to seven thousand beneficiaries.
Also, ninety two billion naira has so far been disbursed to Agric and Manufacturing firms out of the one trillion naira dedicated for that sector.
Meanwhile, about ten billion naira has also been disbursed to Medical and Pharmaceutical companies.
Mr. Emefiele said there has never been a better opportunity to diversify the economy away from oil and urged for consistent and complimentary fiscal policies to achieve the much sought after diversification of the economy.