The Central Bank of Nigeria (CBN) has cut its benchmark interest rate from 26.5 per cent to 23 per cent, marking a 350-basis-point reduction at its latest Monetary Policy Committee (MPC) meeting.
CBN Governor Olayemi Cardoso announced the decision on Tuesday, September 22, 2026, at the end of the MPC’s 307th meeting in Abuja.
The latest reduction brings the Monetary Policy Rate (MPR) to 23 per cent, after the committee retained the rate at 26.5 per cent during its previous two meetings. The CBN had earlier reduced the rate by 50 basis points in February 2026.
Cardoso said the committee decided to reset the MPR to 23 per cent and recalibrate the Standing Facilities Corridor to +50/-300 basis points around the new policy rate.
The MPC, however, retained the Cash Reserve Requirement (CRR) for deposit money banks at 45 per cent and merchant banks at 16 per cent. The CRR for non-Treasury Single Account public-sector deposits was also maintained at 75 per cent.
Inflation Eases
The rate reduction comes amid a moderation in Nigeria’s headline inflation.
According to the latest Consumer Price Index released by the National Bureau of Statistics, headline inflation fell slightly to 15.39 per cent in August 2026 from 15.43 per cent in July.
The August figure represented the third consecutive monthly decline in headline inflation following three months of increases, according to reports on the MPC decision.
The CBN’s latest move therefore comes against a backdrop of easing inflation and relatively stable foreign exchange conditions.
What the Rate Cut Means
The MPR is the CBN’s key benchmark for monetary policy and can influence borrowing costs, lending rates and other interest rates across the financial system.
A lower policy rate can create room for reduced borrowing costs, although commercial banks do not necessarily have to reduce their lending rates by the same amount. The eventual impact will depend on factors including banks’ funding costs, liquidity and credit risks.
The CBN said the recalibration of the policy corridor was intended to strengthen monetary policy transmission and reinforce the role of the MPR in guiding market interest rates.
The latest decision represents a 3.5 percentage-point reduction from the previous 26.5 per cent benchmark rate.
Further details of the MPC’s assessment of inflation, economic growth, exchange-rate developments and other risks are expected in the committee’s full communiqué.
