The Central Bank of Nigeria (CBN) has reduced its benchmark interest rate, the Monetary Policy Rate (MPR), by 50 basis points, lowering it from 27.5 percent in July to 27 percent. The decision was reached at the 302nd meeting of the Monetary Policy Committee (MPC), held on September 22nd and 23rd, 2025.
According to CBN Governor Olayemi Cardoso, who addressed journalists after the meeting, the move was influenced by the sustained disinflation trend observed over the past five months and projections that inflation will continue to decline for the remainder of 2025.
He noted that the Committee’s decision also reflects the need to balance inflation control with policies that support broader economic stability.
The MPC retained the asymmetric corridor around the MPR at +260 and -250 basis points, signaling a cautious stance in managing market volatility. To enhance liquidity management, the Committee introduced a 75 percent cash reserve requirement (CRR) on non-TSA public sector deposits, while adjusting other monetary tools.
For commercial banks, the CRR was lowered to 45 percent, while merchant banks will maintain their requirement at 16 percent. Meanwhile, the liquidity ratio remains unchanged at 30 percent, ensuring a consistent buffer for financial institutions.
The Committee also announced adjustments to the standing facilities corridor, a move aimed at improving market efficiency and strengthening the transmission of monetary policy across the banking sector.
With inflation easing and macroeconomic indicators showing signs of stability, the CBN’s latest policy shift reflects its effort to strike a delicate balance between curbing inflationary pressures and stimulating growth in Africa’s largest economy.
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