The Central Bank of Nigeria (CBN) at the end of its 307th Monetary Policy Committee (MPC) meeting concluded today reduced the Monetary Policy Rate (MPR), the benchmark lending rate by 350bps to 23.00% from 26.50%.
The apex bank also adjusted the asymmetric corridor around the MPR to +50/-300bps from +50/-450bps.
However, members of the committee decided to retain the Cash Reserve Ratio (CRR) for Deposit Money Banks and Merchant Banks at 45.00% and 16.00%, respectively as well as the 75.00% CRR on Non-TSA public sector deposits was retained.
The MPC members also voted in support of the retention of the Liquidity Ratio (LR) at 30.00%.
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Speaking on the decisions of the MPC on the monetary rates, the CBN Governor, Olayemi Cardoso, explained that the committee examined recent trends in the global and domestic economic environment, considered emerging risks to the outlook and evaluated their potential for monetary policy.
The banker clarified: “The Committee decided as follows: reset the monetary policy rate at 23 per cent.
“The MPC emphasized that the duration of the corridor does not constitute a change in the current monetary policy stance, but rather an operational reset to enhance the effectiveness of monetary policy and support the transition to an inflation targeting framework.
“Members are of the view that the macroeconomic environment remains supportive of such a recalibration without undermining the disinflation process”, he added.
Cardoso said that that the MPC members acknowledged that the bank’s ongoing review of the monetary policy implementation framework, adding that they agree that transaction-based operational benchmark proved the transparency of money market operations.
He expatiated: “The committee therefore considered the reset of the MPR and recalibration of the corridor appropriate to better align the monetary policy implementation framework with market realities. This would strengthen policy transmission and restore the MPR as a principal signal of monitor.”
The apex bank’s latest decision came as the nation’s headline inflation ebbed to 15.39% in August 2026.
Experts believe that the downward adjustment of the benchmark and other rates have the potential of improving banks’ lending to businesses at lower rates, thereby reducing the cost of goods and services if sustained in the months ahead.
