CBN slashes interest rate to 23%
CBN Building
Abdullateef Fowewe
The Central Bank of Nigeria (CBN) on Tuesday significantly cut its Monetary Policy Rate (MPR) to 23 per cent from 26.5 per cent at the conclusion of the Monetary Policy Committee’s (MPC) 307th meeting in Abuja.
In an official statement, the CBN said the committee “voted on policy parameters as follows: Monetary Policy Rate (MPR): Reset to 23%. Standing Facilities Corridor: Recalibrated at +50 / -300 basis points around the MPR.
“Cash Reserve Requirement (CRR): Retained at 45% for Deposit Money Banks, 16% for Merchant Banks, and 75% for non-TSA public sector deposits.”
CBN Governor Olayemi Cardoso announced the decisions, with reports quoting him as saying the committee decided to “reset the monetary policy rate to 23 per cent.”
The 350-basis-point reduction is one of the largest single cuts in recent years and comes after the rate was held steady at 26.5 per cent in the previous two meetings (May and July 2026).
It follows a more gradual easing cycle that began after rates peaked at 27.5 per cent during the aggressive tightening phase of 2024.
The decision arrives against a backdrop of moderating inflation, Dailyeconomy observed.
Nigeria’s headline inflation eased to 15.39 per cent in August 2026 from 15.43 per cent in July, marking the third consecutive monthly decline and a sharp drop from levels above 23 per cent a year earlier.
Policymakers cited improved foreign exchange stability, better monetary policy transmission (as market rates had diverged from the high benchmark), and the need to support economic activity while remaining mindful of remaining price pressures.
The recalibrated standing facilities corridor narrows the lower bound relative to the previous +50/-450 basis points setup, while cash reserve requirements were left unchanged to help manage liquidity in the banking system.
