BREAKING: CBN reduces interest rate to 23%
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) at its 307th Policy Meeting in Abuja on Tuesday voted to lower the Monetary Policy Rate (MPR) or interest rate by 350basis points to 23.00 per cent from previously 26.50 per cent.
The committee adjusted the asymmetric corridor around the MPR to +50bps/-300bps (Prev.: +50bps/-450bps), hold the CRR for Deposit Money Banks (DMBs) at 45.0per cent, and Merchant Banks at 16per cent; hold the CRR on non-Treasury Single Account (TSA) public sector deposits at 75per cent and hold the Liquidity Ratio (LR) at 30 per cent.
The cut in interest rate is based on ease in inflation rate and Naira gaining at the foreign exchange market.
On the possibility of a cut in interest, a group of analysts at Cordros Research noted that the global and domestic developments since the July 2026 meeting strongly favour the MPC maintaining its current policy stance.
“Globally, major central banks are adopting a more hawkish stance, providing no external impetus for the CBN to ease policy.
“Domestically, the resumption of disinflation, robust growth, improved external buffers, and relative exchange rate stability provide immediate justification for easing. At the same time, elevated liquidity in the financial system remains a consideration for the MPC.
“Taken together, these global and domestic dynamics lead us to suggest that the MPC will maintain the MPR at 26.50per cent at the meeting, resulting in a HOLD decision. We also expect the Committee to adjust the Standing Facilities Corridor to +50/–500 basis points around the MPR. All other policy parameters are expected to remain unchanged.”
They noted that the 307th MPC meeting convenes against a backdrop of stronger growth, the resumption of disinflation, a firmer naira, higher foreign exchange reserves, elevated system liquidity and a tightening global monetary policy landscape.
“Against this backdrop, we expect the MPC to maintain the MPR at 26.50per cent while adjusting the Standing Facilities Corridor to +50/–500basis points around the MPR, bringing the effective SDF rate to 21.5per cent and the SLF rate to 27.0per cent. All other parameters are expected to remain unchanged, including CRR for DMBs at 45.00per cent, the CRR for Merchant Banks at 16.00per cent, the CRR for non-TSA public sector deposits at 75.00per cent, and the liquidity ratio at 30.00per cent.
“For investors, the expected decision should preserve the relative attractiveness of naira carry positions and support near term yield stability. We see the November 2026 MPC meeting as the next potential window for a policy pivot, conditional on the disinflation trajectory remaining intact,” they explained.
