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The Central Bank of Nigeria concluded its Monetary Policy Meeting on Wednesday leaving Monetary Policy Rates at 14% for the second year running. The central bank’s governor, Godwin Emefiele announced that it was leaving MPR at 14%, CRR at 22.5% Liquidity Ratio at 30%.

In terms of the vote split the 7 members voted to keep rates the same and 2 members, however, voted to increase the MPR by 50 basis points, while one member voted to increase the MPR by 25 basis points.

The decision to keep rates the same was not unexpected as most analysts surveyed by Nairametrics predicted that the CBN will yet again keep things the same as it has since July 2018. What was however different this time was the CBN’s latest initiative at artificially bringing down interest rates.

In a surprise move the CBN Governor Godwin Emefiele encouraged large corporations to “issue commercial paper to meet their credit needs and the Central Bank of Nigeria may, if need be, buy those instruments to complement the efforts of the DMBs.”

This decision suggests that the Central Bank is willing to start buying corporate debts in an effort to inject liquidity in the market and put cash on the balance sheet of corporates. The Governor went further in its press briefing indicating that they intend to buy these debts at lower rates.


Just recently, Dangote Group, one of Nigeria’s largest corporate organisations listed its N50 billion Commercial Paper at 13.21%, one of the lowest ever by a private enterprise. Sterling Bank, UACN and Nigeria Breweries have also issued commercial papers this year at yields of about 16%, 14%, and 16% respectively.

Some Economist that we spoke to at Nairametrics suggest the CBN buying private sector debt is basically quantitative easing (QE). QE is an economic policy used during the world economic crisis and involves the CBN indirectly placing money on the balance sheet of banks to on-lend to the private sector via financial instruments. CBN lends to banks at single digits and then the money is lent by the banks via instruments like commercial papers to the private sector at rates lower than 10%.

The Central Bank Governor also went further. In the policy statement they indicated that “as a way of incentivise deposit money banks to increase lending to the manufacturing and agriculture sectors, a differentiated dynamic cash reserves requirement (CRR)regime would be implemented, to direct cheap long-term bank credit at 9 per cent, with a minimum tenor of seven (7) years and two (2) years moratorium to employment elastic sectors of the Nigerian economy.”

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This basically means the CBN will release more of the cash statutorily held on behalf of banks to them provided they are willing to lend the money to select sectors at an interest rate of 9% and a tenor of 7 years.

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Analysts speaking to by Nairametrics suggest this might be a hard sell especially of treasury bills rates and long-term government bond yields continue to be above double digits. Banks will rather keep the cash with the CBN at a risk-free rate than lend it at 9% to businesses in an economy that is susceptible to price shocks and external risks.




Nairametrics is Nigeria's top business news and financial analysis website. We focus on providing resources that help small businesses and retail investors make better investing decisions. Nairametrics is updated daily by a team of professionals. Post updated as "Nairametrics" are published by our Editorial Board.


  1. qualitative easing by the cbn,in Nigerian society,but this qualitative easing word,you ‘re using now compare with others are not the same or do you means the cbn decision to give priority in forex allocation to the manufacturing companies, qualitative easing in forex or not.,qualitative easing otherwise called printing money comes as the last restort as,used in Britain and usa.
    Now the governor said the banks are resisting to lend,why not take the governor statement on face-value,now why should the cbn do qualitative easing now ?,the major problem is that we have an irresponsible and incompent govt, I am not sure with this qualitative easing,i felt the cbn will continue with this omo or,there maybe new intiative by the cbn after this mrr sh–t meeting,and it barely started and when will it stop.IF THEY STARTED THIS OMO WITH FULL POWER AND SPEED,IT WILL MOVE THE ECONOMY,moreso,i have read,the cbn have licensed some regional bank,now I am search for this confirmation in the Nigeria media

    • Nigeria economy is just unique. To balance interest rate equation to a single digit by lending to business investing in inventories,pp&e is the next logical step. The CBN had to do this business investment is crucial in bringing interest rate down not only interest rate but the rise in economic activity itself.
      what the CBN is saying is that banks do what you are doing but if a viable corporation comes to you with a business plan come to us and we assist in lending to the corporation. the money goes to the coy at 9% 7yrs the bank reaps the interest on the loan,the loan is on cbn balance sheet. if that doesnt work i dont know what else will work.

  2. Folks Last night,i feel,i did not makes my comment much clear,qualitative easing is done ,when other method do not work,it is a sign of desperation,and alsohappened to a country with a period when it’s national economy have reach saturation,which is not the same with Nigeria.
    Who are doing qualitative easing also known as printing of money presently ? and which countries are japan,britain,european economic zone and the usa,japan have a very lower percentage of it’s gnp,now it’s national debt is about 240 % of it’s gnp as at now.it looks japan wants to push it’s economy by the private sector,but also discourages migration by cutting public bank loan to ultra low about half %,they also did massive public spending.And it is not working up till today.They did an Abe stimulus a few yrs ago,now,historically since about 1950,japan was growing about 20 % annually,up till the 1970.
    Certainly,i do not want to comment on the usa economy,or the british economy,or the European union,as ,as some of my previous writing did touched on the American or the british economy,as the sources of the originof this economic problem in the American or the british economies, started during the presidency of Mr Reagan and the premiership of Mrs Thatcher,also I do not think Mr Trump’s trade war not bad as it should be.Why now ?if you start a trade war,you must subsidizes your economy in one form,or in another way.which they are doing now,with their farmers
    With the European union,the plan was to save the union of European,a single monetary union is the peak of it’s co-operation and integration,if a single nmonetary union collapse now,the is a really risk of the European union,breaking-up immediately,now qualitative easing in the European union was done mostly to save the union,or giving more powers to those national central bank.
    Qualitative easing in Nigeria m,,,mh….if they do that in Nigeria ,I will be the happiest man in Nigeria.i.e. they must cut public bank interest to about 1%,they may also do this home grown national forex bond.This qualitative easing which nairametric mentioned,wili be closer to the open market operation monetary strategy,as it will give the cbn vast tool to uses


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