Nigeria, Sept. 28 -- The gut reaction to the decision, last week, by the Central Bank of Nigeria's (CBN) rate-setting committee to drop its benchmark rate by 350 basis points to 23 per cent, is to look at its effect on government borrowing. All things being equal, a lower monetary policy rate should let government issue treasury bills and other domestic debt more cheaply. While this does not change the weight of older debts, it raises the possibility of government issuing new debt at the cheaper rate to retire older more expensive borrowing. Even then, debt conversion will not materially alter the burdensome nature of our public debt on government's finances.

It helps the conversation, then, that the CBN described its rate-cutting and th...