The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) on Tuesday, September 22, cut the Monetary Policy Rate (MPR) to 23 percent, the lowest since February 2024.
Olayemi Cardoso, CBN’s governor, announced the development at a news conference, following the committee’s 307th meeting in Abuja.
The reset marks the first reduction this year and the lowest since February 2024, when the interest rate was at 22.75 percent.
The latest MPR, which is the benchmark interest rate in a nation, comes after Nigeria’s headline inflation rate dropped to 15.39 percent in August 2026 from 15.43 percent in July, according to the National Bureau of Statistics (NBS).
Speaking at the news conference, Cardoso said the CBN committee also cut the asymmetric corridor around the MPR at+50/-300 basis points.
The governor said the committee retained the Cash Reserve Ratio (CRR) at 45 percent for deposit money banks and 16 percent for merchant banks, while the CRR on non-treasury single account public sector deposits was also retained at 75 percent.
According to Cardoso, the decision to reset the MPR and adjust the corridor was aimed at strengthening monetary policy transmission and reinforcing the MPR as the main signal of monetary policy.
“The MPC emphasized that the recalibration 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,” Cardoso said.
The governor said the MPC members considered the current macroeconomic environment supportive of the adjustment without undermining the disinflation process.
He added that the divergence between the MPR and prevailing market rates had weakened the effectiveness of monetary policy transmission.
Cardoso said the CBN’s ongoing repair of its monetary policy implementation framework, including the adoption of the Nigerian Overnight Funding Average (NOFA) as a transaction-based operational benchmark, had improved the transparency of money market operations.
“The committee therefore considered a reset of the MPR and recalibration of the corridor appropriate to better align the monetary policy implementation framework with market realities,” he said.
The CBN governor said the adjustment would strengthen policy transmission and restore the MPR as the principal signal of monetary policy.
Cardoso also said that the recalibration of the policy framework should not be interpreted as a change in the underlying monetary policy stance.
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