Nigeria’s Monetary Policy Committee (MPC) under the Central Bank of Nigeria has reduced the benchmark interest rate to 27 percent, its first cut in 2025 and the first in five years, signaling a shift toward supporting economic recovery. The 50-basis point reduction, announced by Central Bank Governor Olayemi Cardoso after the 302nd MPC meeting in Abuja, follows three consecutive pauses.
The committee also adjusted the Standing Facilities corridor to +250/-250 basis points, raised the Cash Reserve Ratio (CRR) for commercial banks to 45 percent, introduced a 75 percent CRR on non-TSA public sector deposits, and left the Liquidity Ratio unchanged at 30 percent. Cardoso explained that the move was supported by sustained disinflation, with headline inflation easing to 20.12 percent in August from 21.88 percent in July.
While the cut was welcomed as a positive signal, business leaders argued it remains too marginal to ease credit costs for manufacturers and SMEs. Analysts say further reductions, coupled with fiscal reforms, are needed to unlock affordable lending, stimulate private investment, and consolidate Nigeria’s economic recovery.
