The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has trimmed the benchmark interest rate by 50 basis points, reducing it from 27.5% to 27%.
The decision was reached during the committee’s 302nd meeting, held on September 22 and 23, 2025.
The move marks the first rate cut since the tightening cycle began, signaling a shift in policy direction as inflationary pressures begin to ease.
CBN Governor Dr. Olayemi Cardoso, speaking at a post-meeting press briefing, explained that the decision was informed by five consecutive months of slowing inflation and optimistic projections for continued disinflation through the remainder of the year.
He noted that the adjustment is aimed at supporting economic growth while maintaining price stability.
“The committee’s decision to lower the monetary policy rate was predicated on the sustained disinflation recorded in the past five months, projections of declining inflation for the rest of 2025, and the need to support economic inflation records,” Cardoso said.
Read Also
READ ALSO: CBN Orders Banks, DSIBs to Seek Approval For New CEO
The asymmetric corridor around the Monetary Policy Rate (MPR) was retained at +260/-250 basis points, reflecting the CBN’s measured approach to managing market liquidity and interest rate volatility.
In addition to the rate cut, the MPC announced changes to banks’ reserve requirements.
The cash reserve ratio (CRR) for commercial banks was reduced from 45% to an unspecified new level, while that for merchant banks was maintained at 16%.
A new policy was also introduced: a 75% CRR on non-TSA (Treasury Single Account) public sector deposits, aimed at tightening control over government-related liquidity in the system.
The liquidity ratio for banks remains unchanged at 30%, preserving a stable buffer for financial institutions.
The committee’s latest decisions reflect a delicate balancing act by the CBN—seeking to foster economic growth while keeping inflation in check in a gradually stabilizing macroeconomic environment.
