8 Things to Know About CBN Rate Cut, Others

The Central Bank of Nigeria (CBN) on Tuesday cut its benchmark interest rate by 350 basis points, taking the Monetary Policy Rate (MPR) from 26.5 per cent to 23 per cent.

The decision, announced by CBN Governor Olayemi Cardoso at the end of the Monetary Policy Committee’s 307th meeting in Abuja, marks the sharpest single reduction in the rate’s history and signals a decisive shift after nearly two years of tight monetary policy.

Breaking: CBN Cuts Benchmark Interest Rate to 23%

The cut comes as Nigeria’s inflation trend continues to improve, with headline inflation easing for a third consecutive month to 15.39 per cent in August. For businesses and borrowers who have weathered one of the country’s most aggressive tightening cycles, the move could translate into cheaper credit in the months ahead.

Here’s what you need to know about the latest MPC Meeting Decisions:

It’s the biggest cut in the MPR’s history. The CBN slashed the benchmark rate by 350 basis points — from 26.5 per cent to 23 per cent — the largest single reduction the Monetary Policy Rate has ever seen.

This ends a run of back-to-back holds. The MPC kept the rate unchanged at 26.5% at both its May and July meetings this year, opting to wait before moving again.

It follows an earlier cut in February. The MPC had reduced the rate by 50 basis points, from 27 per cent to 26.5 per cent, at its February 2026 meeting.

The rate is back where it was in February 2024. Before the aggressive tightening cycle pushed it as high as 27.5 per cent in 2025, the MPR last stood in the 23 per cent range nearly two and a half years ago.

The rate is now 4.5 percentage points below its pre-easing peak. At 23 per cent, the MPR is well off the 27.5 per cent high recorded before the cutting cycle began, underscoring how far monetary policy has shifted in a year.

Falling inflation drove the decision. Headline inflation has now eased for three straight months, dropping to 15.39 per cent in August from 15.43 per cent in July, giving the MPC room to loosen policy.

The lending corridor was adjusted too. The MPC recalibrated the Standing Facilities Corridor to +50/-300 basis points around the new MPR, which will shape the rates banks pay to borrow from or lend to the CBN.

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Cash reserve requirements stayed put. Despite the rate cut, CRR was held steady — 45 per cent for deposit money banks, 16 per cent for merchant banks, and 75 per cent for non-TSA public sector deposits — meaning banks’ reserve obligations haven’t changed even as the cost of CBN funds falls.