Six days after the Central Bank of Nigeria slashed its benchmark Monetary Policy Rate by 350 basis points — from 26.5% to 23% at its 307th MPC meeting, the largest cut since December 2006 — commercial banks have yet to pass the reduction on to borrowers. One Tier 1 bank official said there are currently no plans to revise loan pricing. The cut, which surprised markets (a Bloomberg survey had found five of eight economists expecting the rate to hold), followed a third straight monthly fall in headline inflation to 15.39% in August, with food inflation at 19.57% and core inflation at 13.29%. The MPC also narrowed its standing facilities corridor and left the Cash Reserve Ratio unchanged at 45% for commercial banks. Whether the cut ultimately reaches households and businesses now depends on how quickly lenders choose to reprice loans.
