The Central Bank of Nigeria (CBN) has reduced its Monetary Policy Rate (MPR) from 26.5 per cent to 23 per cent, marking a 350-basis-point cut in the benchmark interest rate.
CBN Governor, Olayemi Cardoso, announced the decision on Tuesday during a briefing following the 307th meeting of the Monetary Policy Committee (MPC).
Announcing the decision, Cardoso said, “The Committee decided as follows: reset the monetary policy rate to 23 per cent.”
The latest reduction comes after the MPC retained the MPR at 26.5 per cent at its two previous meetings. The CBN had earlier reduced the rate by 50 basis points in February 2026, from 27 per cent to 26.5 per cent, before maintaining it at subsequent meetings.
Cardoso also disclosed that Nigeria’s foreign exchange reserves had risen to about $55 billion. A report published on Tuesday put the reserves at $55.25 billion as of September 18, providing more than 11 months of import cover.
The increase in reserves comes amid improved foreign exchange conditions and stronger external inflows. The CBN had reported reserves of $52.52 billion as of July 17, showing further growth in the country’s external buffer.
The rate cut also comes against the backdrop of easing inflation. Nigeria’s headline inflation fell for the third consecutive month in August, declining to 15.39 per cent from 15.43 per cent in July.
The latest decision is expected to attract attention from businesses, investors and financial institutions, as the MPR serves as a key benchmark for monetary conditions in the economy. The extent to which the reduction translates into lower lending costs will depend on how commercial banks and other financial institutions respond.
The CBN’s decision signals a recalibration of monetary policy as inflation moderates and foreign exchange reserves strengthen, while the bank continues to balance price stability with broader economic conditions.
