The Central Bank of Nigeria (CBN) has announced a 50 basis point reduction in its benchmark interest rate, lowering it from 27.5% to 27%.
This marks the first rate cut since 2020, signaling a shift towards a more accommodative monetary policy.
The CBN Governor, Yemi Cardoso, announced this while presenting a communiqué from the 302nd meeting of the Monetary Policy Committee, MPC.
This marks a departure from the aggressive tightening monetary policy stance of the MPC since 2024.
Cardoso attributed the decision to a consistent decline in inflation, with the latest data showing a year-on-year rate of 20.12% in August.
This represents the fifth consecutive monthly decrease, following a period of elevated inflation in 2024.
According to him, the members of the MPC unanimously agreed to the cut due to the country’s inflation decline for the past five months.
MPC also adjusted the Cash Reserve Ratio, CRR, to 45 percent for Deposit Money Banks and 16 percent for Merchant Banks.
It also adjusted the asymmetric corridor at +250/-250 basis points around the MPR.
The committee retained the liquidity ratio, LR, at 30 percent
