By Ayo Kehinde
The Central Bank of Nigeria (CBN) has cut its benchmark Monetary Policy Rate (MPR) by 350 basis points to 23 percent, from 26.5 percent.
The decision was taken at the 307th meeting of the Monetary Policy Committee (MPC) held in Abuja, with 11 members in attendance.
The sharp reduction marks a major shift in the central bank’s monetary policy stance, coming after the MPC had maintained the MPR at 26.5 percent at its previous meetings.
The latest decision also represents the first major reduction in the benchmark rate since the CBN cut the MPR by 50 basis points to 26.5 percent in February 2026.
The rate cut comes as inflation continues to moderate. Nigeria’s headline inflation eased to 15.39 percent in August from 15.43 percent in July and 15.91 percent in June, according to the National Bureau of Statistics.
The CBN’s decision is expected to have implications for borrowing costs, fixed-income yields and liquidity conditions across the financial system, although the extent to which the reduction feeds through to bank lending rates will depend on market conditions and banks’ pricing decisions.
The MPC’s full communiqué is expected to provide details of the committee’s assessment of inflation, economic growth, exchange-rate developments and financial conditions, as well as decisions on other policy parameters.
The CBN had maintained the MPR at 26.5 percent since February, while keeping the Standing Facilities Corridor at +50/-450 basis points around the MPR and the Cash Reserve Requirement for deposit money banks at 45 percent.
The 350-basis-point reduction brings the benchmark rate to 23 percent as the central bank begins what could mark a significant easing of monetary conditions.
