Nigeria’s Central Bank has cut its benchmark Monetary Policy Rate (MPR) to 23 per cent, citing improved economic conditions, easing inflation expectations and greater stability in the foreign exchange market.
The decision was taken at the 307th meeting of the Central Bank of Nigeria’s Monetary Policy Committee (MPC), which also recalibrated the Standing Facilities Corridor to +50/-300 basis points around the MPR.
The Committee retained the Cash Reserve Requirement (CRR) at 45 per cent for Deposit Money Banks, 16 per cent for Merchant Banks and 75 per cent for non-TSA public-sector deposits.
CBN Governor Cardoso said the decision was an operational reset rather than a change in the Bank’s overall policy stance.
He said the adjustment was intended to strengthen monetary policy transmission, align market interest rates with the monetary policy framework and reinforce the MPR as the primary policy signal.
The MPC pointed to improvements across several key economic indicators, including external balances, exchange-rate stability, inflation expectations and economic growth.
Nigeria recorded a balance of payments surplus of US$3.51 billion in the second quarter of 2026, while the current account surplus rose to US$7.54 billion.
The economy also expanded by 4.43 per cent in real terms during the quarter, while the Purchasing Managers’ Index (PMI) increased to 52.7 in August, indicating continued expansion in business activity.
Foreign exchange reserves climbed to US$55.25 billion, equivalent to 11.3 months of import cover, strengthening the country’s external position.
The MPC attributed the moderation in inflation partly to previous monetary policy tightening, sustained exchange-rate stability and improved inflation expectations.
The Committee also welcomed developments in the financial and broader economic sectors, including the successful recapitalisation of the banking sector, implementation of the National Affordable CNG Transit Programme and a Memorandum of Understanding between the Federal Ministry of Finance and the CBN on fiscal and monetary policy coordination.
Reflecting on reforms undertaken during his three years as Governor, said the CBN had focused on restoring confidence in the financial system, strengthening monetary and financial stability and reforming the foreign exchange market.
The reforms have also targeted rebuilding external reserves, improving policy credibility, increasing diaspora remittances and strengthening the resilience of Nigeria’s banking sector.
Cardoso reaffirmed the CBN’s independence and apolitical position, saying the Bank would continue to manage money supply effectively during the election period.
The latest decision comes as the CBN seeks to balance the need to support economic activity with its mandate of maintaining price and financial stability.
The Bank said it would continue to rely on economic data in setting monetary policy while pursuing reforms aimed at building a more resilient Nigerian economy.
