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CBN retains rates again

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The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has left the Monetary Policy Rate at 14% and other parameters unchanged.

MPR was thus left at 14%, Cash Reserve Ratio CRR at 22.5% and Liquidity Ratio at 30%.  The asymmetric corridor for the MPR was also left at +200/-500 basis points.

The Monetary Policy Rate (MPR) is the rate at which the CBN lends to commercial banks. This, in turn, provides a benchmark at which the banks lend to the public.  The Cash Reserve Ratio (CRR) is the proportion of a bank’s deposits it has to hold as deposits either in cash or with the CBN.

Liquidity ratio is the ratio of a bank’s liquid assets to its liabilities. In other words, a bank’s cash balance plus assets that it can easily convert to cash to the total liabilities owed by the bank, which is typically deposits.

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