*MPC Cuts Interest Rate
THE Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, on Tuesday, September 23, announced that 14 banks had so far met the new regulatory capital requirements introduced earlier this year.
Cardoso, while briefing journalists in Abuja on the outcome of the Monetary Policy Committee (MPC) meeting in Abuja, said: “On the financial sector, the MPC noted the continued resilience of the banking system, with most financial soundness indicators remaining within projected benchmarks.
“Members also acknowledge the significant progress in the ongoing bank recapitalisation exercise, as 14 banks have fully met the new capital requirement.
“The MPC, therefore, urge the bank to continue the implementation of policies and initiatives that will ensure the successful completion of the ongoing recapitalisation exercise.”
He also announced the successful termination of forbearance measures and waivers on civil obligors, which he said had enhanced transparency, risk management and long-term financial stability in the sector, assuring that the action was only transitory and did not pose any risk to the soundness or stability of the banking industry.
Recall that the CBN, on March 28, 2024, raised the minimum capital requirement for commercial banks with international licences to N500billion.
Since then, banks in the country have embarked on measures to raise their capital base to meet the target, including share offers and bond issuances.
On July 22, CBN said only eight banks had fully met the requirements.
In a related development, the apex bank, has reduced the benchmark interest rate to 27.00 per cent, the first cut this year, after three consecutive retentions.
Cardoso, who said all 12 members of the MPC attended the meeting, added that the committee decided to reduce the rate by 50 basis points, adjusted the Standing Facilities Corridor to +250/-250 basis points, raise the Cash Reserve Requirement for commercial banks to 45 per cent and retained that of merchant banks at 16 per cent, while introducing a 75 per cent CRR on non-TSA public sector deposits, leaving the Liquidity Ratio unchanged at 30 per cent.
Cardoso stated that the rate cut was justified by “sustained disinflation recorded in the past five months, projections of declining inflation for the rest of 2025, and the need to support economic recovery efforts.”
The committee noted that headline inflation moderated to 20.12 per cent in August from 21.88 per cent in July, while food inflation dropped to 21.87 per cent from 22.74 per cent.
Core inflation also eased to 20.33 per cent from 21.33 per cent over the same period, while month-on-month inflation slowed sharply to 0.74 per cent in August, compared with 1.99 per cent in July.
According to Punch, the rate cut was the first under Cardoso’s leadership. The last CBN cut in benchmark interest rate was in September 2020, under Godwin Emefiele, when it lowered the Monetary Policy Rate (MPR) from 12.5 per cent to 11.5 per cent.
