The Central Bank of Nigeria (CBN) has cut its benchmark interest rate by 350 basis points to 23 per cent, signalling a significant shift in monetary policy as inflation continues to moderate.
The Monetary Policy Committee announced the decision at its 307th meeting held in Abuja on September 21 and 22, 2026, reducing the Monetary Policy Rate from 26.5 per cent.
The move takes the MPR back to levels last seen in early 2024, when the rate stood at 22.75 per cent in February before successive increases pushed it higher.
The MPC also recalibrated the Standing Facilities Corridor to +50/-300 basis points around the new MPR.
Despite the rate cut, the committee retained the Cash Reserve Requirement at 45 per cent for Deposit Money Banks and 16 per cent for Merchant Banks.
The CRR for non-Treasury Single Account public sector deposits was also retained at 75 per cent.
The decision came as Nigeria’s inflation rate continued to ease. Headline inflation fell marginally to 15.39 per cent in August from 15.43 per cent in July, according to the National Bureau of Statistics.
Food inflation also declined to 19.57 per cent year-on-year during the month.
The latest figures followed the rebasing of the Consumer Price Index by the NBS, which adopted 2024 as the new base year. August inflation under the new series was also significantly lower than the 23.14 per cent recorded in August 2025.
The CBN had kept the MPR at 26.5 per cent at its May meeting after a 50-basis-point reduction from 27 per cent in February.
The latest decision therefore represents the largest single reduction in the benchmark rate since the easing cycle began in 2026, bringing the policy rate 3.5 percentage points below its previous level.
The MPR is the CBN’s benchmark for the cost of short-term funds and influences lending rates, deposit rates and broader money-market conditions.
Despite the latest reduction, the 23 per cent MPR remains above the August inflation rate of 15.39 per cent, leaving the benchmark rate in positive territory in real terms.
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