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(From Vanguard (Nigeria) - AAGM)
Byline: Babajide Komolafe
THE Central Bank (CBN) yesterday scrapped the old monetary policy of using the Minimum Rediscount Rate (MRR) as the benchmark for interest rate in the economy, replacing it with the Monetary Policy Rate (MPR). The MRR represents the minimum interest rate banks can borrow from the CBN while the MPR is a short term interest rate at which banks can predictably borrow from the apex bank.
The new Monetary Policy Rate (MPR) will be set at 10 per cent, using the current rate of inflation and the expected inflation rate outcome of 9.0 per cent for 2006 as a guide to ensure that interest rate remain …