The Central Bank of Nigeria (CBN) has cut its Monetary Policy Rate (MPR) from 26.5 percent to 23 percent, marking a sweeping 350-basis-point reduction and easing of its current policy cycle.
Governor Olayemi Cardoso announced the decision at the conclusion of the apex bank’s 307th Monetary Policy Committee (MPC) meeting, a two-day session held in Abuja on September 21 and 22.
The rate cut follows two consecutive holds at 26.5 percent in May and July, which themselves came after a smaller 50-basis-point reduction in February.
Cardoso described this as an operational reset rather than a shift in overall policy direction, saying the committee aimed to strengthen how monetary policy transmits through the economy and to reinforce the primacy of the policy rate.
He emphasised that recalibrating the corridor around the MPR does not represent a change in stance, but a technical adjustment meant to support Nigeria’s transition toward an inflation-targeting framework.
As part of that recalibration, the MPC narrowed the asymmetric corridor around the MPR to +50/-300 basis points, a change designed to discourage commercial banks from parking excess funds with the central bank and instead push more credit into the economy.
Other policy parameters were left unchanged.
The Cash Reserve Ratio remains at 45 percent for deposit money banks, 16 percent for merchant banks, and 75 percent for non-TSA public sector deposits.
The cut comes amid a steady cooling in consumer prices. Nigeria’s headline inflation rate eased to 15.39 percent in August 2026, down from 15.43 percent in July, according to the National Bureau of Statistics — the third consecutive monthly decline. Relative stability in the naira and stronger capital inflows have also given policymakers more room to ease borrowing costs.
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