The Central Bank of Nigeria (CBN) has reduced the country’s benchmark interest rate, the Monetary Policy Rate (MPR), by 50 basis points, bringing it down from 27 percent to 26.5 percent. The decision was taken during the 304th meeting of the Monetary Policy Committee (MPC), attended by all 11 members.
The MPR is the key tool used by the CBN to regulate inflation, manage liquidity, and maintain overall macroeconomic stability. By lowering the rate, the apex bank aims to make borrowing slightly more affordable for businesses and households while sustaining economic growth.
Governor Olayemi Cardoso said the committee’s decision reflects a careful assessment of current economic conditions and the continuing trend of disinflation in the country. The rate cut is the second in five months, signalling a shift toward more accommodative monetary policy after a period of tight rate hikes.
Other regulatory measures were left unchanged. The Cash Reserve Requirement (CRR) remains at 45 percent for commercial banks and 16 percent for merchant banks. The Standing Facility Corridor, which sets the rates at which banks can borrow from or lend to the CBN, has been adjusted to +50 to -450 basis points around the new MPR.
Governor Cardoso also noted that 20 banks have met the apex bank’s recapitalisation requirements, highlighting the resilience of Nigeria’s banking sector amid evolving economic conditions.
The central bank said the rate adjustment aims to balance the need to curb inflation while enabling businesses to access credit for expansion and job creation. Officials remain confident that as long as the naira stays stable and food supply continues, the economy will maintain its recovery trajectory.
Economists and market watchers are expected to track the impact of the new rate on lending, investment, and inflation in the coming months, as the country continues its efforts to stabilise the economy.
