The Central Bank of Nigeria (CBN) has reduced its benchmark Monetary Policy Rate (MPR) from 26.5 per cent to 23 per cent as the apex bank moves to adjust monetary policy amid easing inflationary pressures.
CBN Governor, Olayemi Cardoso, announced the decision on Tuesday at the end of the Monetary Policy Committee’s 307th meeting in Abuja. The 350-basis-point reduction represents the first major cut by the MPC in 2026 after the committee had maintained the rate at 26.5 per cent at its previous meetings. (Channels Television)
The committee also recalibrated the Standing Facilities Corridor to +50 and -300 basis points around the new MPR.
However, the MPC 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-Treasury Single Account public-sector deposits. (Channels Television)
Cardoso said the decision followed an assessment of developments in the domestic and global economy, emerging risks and their potential impact on monetary policy.
The latest rate cut comes as Nigeria records a moderation in inflation. According to the National Bureau of Statistics, headline inflation eased to 15.39 per cent in August 2026 from 15.43 per cent in July. (Punch Newspapers)
The CBN said the adjustment is aimed at strengthening monetary policy transmission and reinforcing the MPR as the principal signal of monetary policy.
The committee also said the recalibration of the policy corridor should not be interpreted as a change in the underlying monetary policy stance, but rather as an operational adjustment designed to improve the effectiveness of monetary policy and support the transition towards an inflation-targeting framework. (TheCable)
The reduction is expected to attract close attention from businesses, investors, banks and borrowers because changes in the benchmark rate can influence borrowing costs and other market interest rates, although the extent and speed of any impact will depend on broader financial-market conditions.
The decision also marks a significant shift from the period of tight monetary policy adopted to address inflation and support macroeconomic stability.
With inflation continuing to moderate, the latest MPC decision provides a fresh indication of the CBN’s approach to balancing price stability with economic activity and access to credit.