The Central Bank of Nigeria (CBN) has lowered its benchmark interest rate (MPR) by 50 basis points to 26.50 per cent, down from 27 per cent.
CBN Governor Olayemi Cardoso announced the unanimous decision following the bank’s 304th Monetary Policy Committee (MPC) meeting in Abuja on Tuesday.
Beyond the rate cut, the committee held the liquidity ratio at 30 per cent and adjusted the standing facilities corridor to +50/-450 basis points around the MPR. The Cash Reserve Ratio remains 45 per cent for commercial banks, 16 per cent for merchant banks, and 75 per cent on non-TSA public sector deposits.
The MPR is a key tool used by the CBN to manage inflation, control liquidity, and ensure macroeconomic stability.
Analysts say the reduction is aimed at lowering borrowing costs for businesses and households, offering some relief amid persistent inflationary pressures, and encouraging economic growth.
This decision marks the first significant cut in the MPR since September last year, when it was lowered from 27.50 per cent to 27 per cent.
Nigeria’s headline inflation marginally decreased to 15.10 per cent in January from 15.15 per cent in December, according to the National Bureau of Statistics (NBS). Economists anticipate this adjustment may stimulate lending and investment, reflecting the Central Bank of Nigeria’s (CBN) cautious yet proactive economic support strategy.
In addition to the rate cut, the committee maintained the liquidity ratio at 30 per cent and adjusted the standing facilities corridor to +50 to -450 basis points around the MPR. The Cash Reserve Ratio for commercial banks and merchant banks remains unchanged at 45 per cent and 16 per cent, respectively, while the 75 per cent CRR on non-TSA public sector deposits is also retained.
