CBN Lowers Interest Rate To 26.5% To Support Businesses And Ease Cost Of Living
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has lowered the country’s benchmark interest rate, the Monetary Policy Rate (MPR), from 27 percent to 26.5 percent in a move aimed at reducing financial pressures on households and businesses.
Announcing the decision on Tuesday after the committee’s 304th meeting, CBN Governor Olayemi Cardoso described the rate cut as part of a shift toward more accommodative lending conditions, following months of aggressive interest rate hikes. The 50 basis-point reduction is intended to make borrowing more accessible while maintaining control over economic stability.
The MPC cited progress in tackling the high cost of living and noted that previous strict policies are beginning to take effect. Improved stability of the naira in the foreign exchange market was also highlighted as a factor influencing the decision.
“The Committee’s decision was based on a balanced evaluation of risks to the outlook, which suggests that the ongoing disinflation path will continue,” Cardoso said.
Other regulatory measures remain unchanged to safeguard the banking sector. The Cash Reserve Requirement (CRR) stays at 45 percent for commercial banks and 16 percent for merchant banks. Meanwhile, the Standing Facility Corridor, which sets the borrowing and lending range for banks at the CBN, has been adjusted to +50 to -450 basis points around the new MPR of 26.5 percent.
Cardoso further revealed that 20 banks have met the CBN’s recapitalisation requirements, praising the sector’s resilience.
The CBN emphasized that the rate cut seeks to balance price stability with business growth, enabling companies to access loans more affordably while curbing rapid inflation. The central bank expressed optimism that as long as food supply continues and the exchange rate remains stable, Nigeria’s economy will maintain its recovery trajectory.
