The Central Bank of Nigeria (CBN) has reduced the Monetary Policy Rate (MPR) from 26.5 per cent to 23 per cent, cutting the benchmark by 350 basis points after keeping it unchanged at 26.5 per cent at its previous two meetings.
The decision was announced by CBN Governor Olayemi Cardoso on Tuesday, September 22, following the Monetary Policy Committee’s 307th meeting in Abuja. The adjustment is the second reduction in the MPR this year and takes the benchmark to its lowest level since February 2024, when it stood at 22.75 per cent.
Brandspur Banking News reports that the CBN linked the decision to improving macroeconomic conditions, including moderating inflation and greater stability in the foreign exchange market. Headline inflation eased for a third consecutive month to 15.39 per cent in August, while real Gross Domestic Product grew by 4.43 per cent in the second quarter of 2026.
The latest adjustment also reflects a gap between the official MPR and rates prevailing in the financial market. The CBN said recalibrating the rate would strengthen monetary policy transmission and restore the MPR as the main signal for interest rates across the economy.
For households and businesses, the change could affect the cost of borrowing as financial institutions adjust to the new benchmark, although the size and speed of any impact on lending rates will depend on how banks transmit the change to customers. Business groups have already called for cheaper credit following the announcement.
The CBN also adjusted the standing facilities corridor to 50 basis points above and 300 basis points below the new MPR, while retaining existing cash reserve requirements for deposit money banks, merchant banks and certain public sector deposits.
The apex bank said the move should not be interpreted as an abandonment of its restrictive monetary policy approach. Instead, it described the adjustment as an operational reset intended to make its policy framework more effective while supporting the transition towards inflation targeting.
The decision came as Nigeria’s external position also strengthened. The country’s gross external reserves stood at $55.25 billion as of September 18, 2026, while the second-quarter current account surplus rose to $7.54 billion from $4.49 billion in the first quarter. The CBN said the improved external position had contributed to greater stability in the foreign exchange market.
