The Central Bank of Nigeria (CBN) on Tuesday, cut the Monetary Policy Rate (MPR) from 27.50 percent to 27 percent, marking the first interest rate reduction since May 2023.
CBN Governor, Olayemi Cardoso, announced the decision at a press conference following the two-day 302nd Monetary Policy Committee (MPC) meeting in Abuja.
“The members of the MPC unanimously agreed to the rate cut in view of the country’s declining inflation over the past five months,” Cardoso said.
Advertisement
He added, “This reduction is aimed at stimulating investment and easing the cost of borrowing for households and businesses, while keeping inflationary pressures under control.”
The MPC also revised the Cash Reserve Ratio (CRR) to 45 percent for Deposit Money Banks and 16 percent for Merchant Banks, while retaining the Liquidity Ratio (LR) at 30 percent.
The asymmetric corridor was adjusted to +250/-250 basis points around the MPR.
Commenting on the economic implications, Cardoso said, “We recognize that manufacturing, trade, ICT, and motor assembly sectors are under pressure.
This policy intervention seeks to provide relief and encourage growth in these critical areas.”
The move follows industrial stakeholders’ calls for a downward easing of the MPR to reduce production costs.
“Lowering the interest rate will help manufacturers manage expenses and boost output,” said Chinedu Okeke, President of the Manufacturers Association of Nigeria (MAN).
Despite the cut, Nigeria’s interest rate and inflation remain among the highest in Africa.
“We still have a challenging economic environment compared to our peers in Ghana and South Africa,” Cardoso acknowledged.
The country’s economy grew by 4.23 percent in Q2 2025, up from 3.13 percent in Q1, while inflation moderated to 21.12 percent in August for the fifth consecutive month.
