CBN Cuts Interest Rate To 23%

Author: Gist Correspondent

The Central Bank of Nigeria (CBN) has cut its benchmark interest rate from 26.5 per cent to 23 per cent as part of measures to strengthen monetary policy transmission and support the transition to an inflation-targeting framework.

CBN Governor, Olayemi Cardoso, announced the decision on Tuesday after the Monetary Policy Committee’s 307th meeting in Abuja.

Cardoso said the committee reviewed developments in the global and domestic economies, emerging risks and their potential implications for monetary policy before arriving at the decision.

“The Committee decided as follows: reset the monetary policy rate at 23 per cent,” he said.

The latest reduction follows two consecutive MPC meetings at which the rate was retained, after a 50-basis-point cut in February 2026.

The committee also recalibrated the standing facility corridor to +50 and -300 basis points around the Monetary Policy Rate (MPR).

However, it 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.

Cardoso said the reset of the MPR and adjustment of the policy corridor represented an operational realignment aimed at improving monetary policy transmission and strengthening the role of the benchmark rate.

He said the committee maintained that the recalibration did not amount to a change in the underlying monetary policy stance.

“The Committee emphasised that the duration of the corridor does not constitute a change in the current monetary policy stance, but rather an operational reset to enhance the effectiveness of monetary policy and support the transition to an inflation targeting framework,” he said.

Cardoso added that the MPC considered the current macroeconomic environment supportive of the adjustment without undermining the ongoing disinflation process.

He said the committee also reviewed the CBN’s efforts to improve its monetary policy implementation framework and strengthen transparency in money market operations.

According to him, the new arrangement is expected to better align monetary policy implementation with market conditions, strengthen policy transmission and restore the MPR as the principal signal of monetary policy.