CBN eases monetary policy, cuts interest rate to 27%
Story by Martha Gwary
The Central Bank of Nigeria (CBN) has reduced its benchmark interest rate from 27.5 per cent to 27 per cent, marking the first rate cut in several months.
CBN Governor Olayemi Cardoso announced the decision on Tuesday at the end of the 302nd Monetary Policy Committee (MPC) meeting in Abuja. He said the move was driven by a recent slowdown in inflation, which created room for cautious easing.
Alongside the rate cut, the MPC adjusted the cash reserve requirement (CRR) for commercial banks to 45 per cent, while retaining the CRR for merchant banks at 16 per cent.
READ ALSO: Substantial potential for interest rates to decrease – CBN Governor
In a further step, the apex bank introduced a 75 per cent CRR on non-Treasury Single Account (TSA) public sector deposits.
Cardoso explained that the measures were designed to maintain stability in the financial system while ensuring adequate liquidity to support economic growth.
He stressed that despite the rate cut, the CBN remains committed to closely monitoring inflationary trends and global headwinds that could impact Nigeria’s economy.
READ ALSO: Nigeria’s trade surplus rises 107% to $2.2bn – CBN
The MPC’s decision reflects a shift from the aggressive tightening stance adopted earlier in the year, when inflation had reached record highs.
Economists say the latest adjustment could ease borrowing costs for businesses and households, but warned that fiscal and structural challenges must also be addressed to sustain growth.
The meeting marked the 302nd gathering of the MPC, underscoring the importance of monetary policy as Nigeria navigates a delicate economic recovery.
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