CBN Lowers Interest Rate By 50 Basis Points To 27%

The CBN has cut Nigeria’s benchmark interest rate by 50 basis points to 27%, citing sustained disinflation and growth needs.

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has reduced the Monetary Policy Rate (MPR) by 50 basis points to 27 per cent.

Governor Olayemi Cardoso, speaking at the 302nd MPC meeting in Abuja on Tuesday, said the decision was driven by sustained disinflation over the past five months, projections of further decline in inflation through 2025, and the need to support economic recovery efforts.

Alongside the rate cut, the committee announced other key adjustments. The standing facilities corridor around the MPR was revised to +250 to -250 basis points, aimed at improving efficiency in the interbank market and strengthening monetary policy transmission.

The committee also raised the Cash Reserve Requirement (CRR) for commercial banks to 45 per cent, while that of merchant banks was retained at 16 per cent. In a new measure, the MPC introduced a 75 per cent CRR on non-Treasury Single Account (TSA) public sector deposits to enhance liquidity management.

He stated, “The committee decided as follows. One, reduce the monetary policy rate (MPR) by 50 basis points to 27%. Two, adjust the standing facilities corridor around the MPR to +250 to -250 basis points. Three, adjust the cash reserve requirement (CRR) for commercial banks to 45 percent while retaining that of merchant banks at 16 percent. Also, to introduce a 75 percent CRR on non-TSA public sector deposits. And four, keep the liquidity ratio unchanged at 30 percent.

“The committee’s decision to lower the monetary policy rate was predicated on the sustained disinflation recorded in the past five months, projections of declining inflation for the rest of 2025, and the need to support economic recovery efforts. The MPC also adjusted the standing facilities corridor to improve the efficiency of the interbank market and strengthen monetary policy transmission. The committee further introduced a 75 percent CRR on non-TSA public sector deposits for enhanced liquidity management.”