- The Central Bank of Nigeria (CBN) has lowered the benchmark interest rate by 50 basis points, from 27.5% to 27%, marking the first reduction in five years. CBN Governor Olayemi Cardoso announced this decision following the 302nd Monetary Policy Committee (MPC) meeting in Abuja on Tuesday.
Additionally, the MPC adjusted the cash reserve ratio (CRR) for commercial banks to 45% from 50%, while maintaining the CRR for merchant banks at 16%. A new 75% CRR was introduced for non-TSA public sector deposits. The asymmetric corridor around the Monetary Policy Rate (MPR) was revised to +250bps/-250bps, from the previous +500bps/-100bps.
Cardoso noted that the rate cut was driven by a sustained decline in inflation, which dropped to 20.12% in August from 21.88% in July 2025, marking five consecutive months of easing. This slowdown was attributed to reduced price pressures in food (21.87% vs. 22.74% in July) and core sub-items (20.33% vs. 21.33%).
The last interest rate reduction occurred in September 2020, when the MPR was cut by 100 basis points from 12.5% to 11.5% to support economic recovery during the COVID-19 pandemic.
