CBN Cuts Interest Rate to 27% as Inflation Eases.

The Central Bank of Nigeria (CBN) has reduced the Monetary Policy Rate (MPR) by 50 basis points, lowering it from 27.5% in July to 27%.

The decision was reached at the 302nd meeting of the Monetary Policy Committee (MPC), held on September 22–23, 2025, with all 12 members in attendance. The asymmetric corridor around the MPR was retained at +260 and -250 basis points, reflecting the Bank’s cautious stance on market volatility and liquidity management.

Briefing the press after the meeting, CBN Governor Olayemi Cardoso said the rate cut was informed by sustained disinflation over the past five months, projections of further inflation decline through 2025, and the need to sustain economic growth momentum.

In addition, the MPC reduced the cash reserve requirement for commercial banks to 45%, while retaining that of merchant banks at 16%. It also introduced a 75% cash reserve requirement on non-TSA public sector deposits to strengthen liquidity management.

To further enhance monetary policy transmission, the Committee adjusted the standing facilities corridor, while maintaining the liquidity ratio at 30%.

Nigerians Regaining Confidence in the Naira — CBN Governor Cardoso.

The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, says Nigerians are showing renewed confidence in the naira, marking a significant shift driven by ongoing monetary reforms and improved macroeconomic stability.

Speaking at the post-Monetary Policy Committee (MPC) press briefing on Tuesday in Abuja, Cardoso highlighted that recent policy measures are yielding positive results, particularly in stabilising the foreign exchange market. “Very importantly, Nigerians are having greater confidence in their own currency,” he said.

He cited a recent conversation with a travel agent who requested payment in naira instead of dollars, describing it as a sign of changing sentiment. “Those are the things that are happening across the board,” he added.

The CBN governor noted that the narrowing gap between official and parallel exchange rates, as well as growing access to Naira-denominated payment systems abroad, are signs of structural reforms, not short-term fixes.

“A lot of what you see going on now is transformational… They are here to stay,” he stressed. Cardoso also announced that all 12 MPC members voted to maintain the Monetary Policy Rate (MPR) at 27.5%, the asymmetric corridor at +500/-100 basis points, the Cash Reserve Ratio at 50% for deposit money banks and 16% for merchant banks, and the liquidity ratio at 30%.

According to him, the decision to hold all key parameters steady for a third consecutive time reflects the Bank’s intention to sustain tightening measures until inflation shows further signs of cooling.