The Central Bank of Nigeria (CBN) has announced a reduction in the interest rate, also known as the Monetary Policy Rate (MPR), to 23 percent. This decision was made at the 306th MPC meeting held on September 21, 2026. The CBN Governor, Mr. Olayemi Cardoso, disclosed this during a media briefing in Abuja. The reduction in interest rate is a significant shift from the previous rate of 26.5 percent, which was retained at the 305th meeting in May 2026.
According to Cardoso, the MPC committee is satisfied with the disinflation progress and noted a stable banking sector following a successful recapitalization. This positive assessment of the economy led to the decision to reset the MPR and recalibrate the monetary policy market. The committee's confidence in the current macroeconomic environment is a key factor in the interest rate reduction.
In May 2026, at the 305th MPC meeting, the committee had decided to retain the interest rate at 26.5 percent. The decision was based on a comprehensive assessment of risks to the outlook. Although inflation had risen marginally for two consecutive months, largely due to external shocks, the MPC recognized its transitory nature. The committee remained confident that the current macroeconomic environment would support a return to disinflation.
The MPC also retained the Standing Facilities Corridor around the MPR at +50/-450 basis points and the Cash Reserve Requirement (CRR) for Deposit Money Banks at 45.00 percent. Merchant Banks' CRR was retained at 16.00 percent, and non-TSA public sector deposits at 75.00 percent. These decisions were made to ensure that the monetary policy stance remained supportive of economic growth.
The reduction in interest rate is expected to have a positive impact on the economy, as it could lead to increased borrowing and spending. This, in turn, could stimulate economic growth and job creation. The CBN's decision to reduce the interest rate is a welcome development for businesses and individuals who have been affected by the high interest rates.
The CBN's move to reduce the interest rate is also seen as a response to the current economic challenges facing Nigeria. The country has been experiencing high inflation rates, which have been a major concern for policymakers. The reduction in interest rate is expected to help reduce the cost of borrowing and stimulate economic activity.
The MPC's decision to reduce the interest rate to 23 percent is a significant shift in the monetary policy stance. The committee's confidence in the disinflation progress and the stable banking sector has led to this decision. The reduction in interest rate is expected to have a positive impact on the economy, and it will be closely monitored by stakeholders to assess its effectiveness.
Key points
- The Central Bank of Nigeria reduces interest rate to 23% citing disinflation progress and stable banking sector.
- The interest rate reduction is a significant shift from the previous rate of 26.5 percent.
- The MPC's decision is expected to stimulate economic growth and job creation.
