Nigeria cuts benchmark rate by two per cent
The cash reserve ratio for commercial banks was also reduced.The Central Bank of Nigeria (CBN) has announced two measures to stimulate growth and improve access to credit.
It lowered its benchmark interest rate from 13 to 11 per cent and reduced the mandatory cash reserve ratio for commercial banks from 25 to 20 per cent.
"We must stimulate growth," said Godwin Emefiele, the Governor of the CBN.
He urged banks to take into account the lower mandatory cash reserve ratio and extend loans to industries that create jobs, including agriculture, infrastructure and minerals.
The unemployment rate was 9.9 per cent in the third quarter, up from 8.2 per cent in the previous quarter.
This decision contrasts with that of other African central banks, including Uganda and South Africa, which increased interest rates in 2015 to counter the weakening of their currency.
"The committee will continue to monitor developments around the naira exchange rate, interest rates and consumer prices," said the governor.