The Central Bank of Nigeria (CBN has announced a cut to its benchmark interest rate—the Monetary Policy Rate (MPR)—for the first time in five years.
The decision, which marks a shift from the apex bank’s long-standing monetary tightening stance, was revealed by CBN Governor Olayemi Cardoso at the end of the two-day Monetary Policy Committee (MPC) meeting in Abuja.
Although the exact new MPR figure was not immediately disclosed by Mr Cardoso, the reduction follows a prolonged period of interest rate hikes meant to curb inflation and stabilise the naira.
The last time the MPR was cut was in September 2020, when it was lowered from 12.5 percent to 11.5 percent to support the economy during the COVID-19 pandemic.
Since then, the CBN had adopted a hawkish monetary policy.
Most recently, in May 2024, it raised the MPR to 26.25 percent—its highest in years—in response to surging inflation and volatility in the foreign exchange market.
Despite the latest rate cut, the CBN retained most monetary policy instruments at existing levels.
The asymmetric corridor remains at +500/-100 basis points, the Cash Reserve Ratio (CRR) was kept at 50.00 percent for Deposit Money Banks and 16.00 percent for Merchant Banks, while the Liquidity Ratio stayed unchanged at 30.00 percent.
The rate cut comes amid signs of easing inflationary pressure and is widely seen as an attempt to support credit expansion and drive investment in key sectors of the economy.
More details on the MPC’s deliberations and the new MPR rate are expected to be made available soon.
