By Ene Mary McDickson, Correspondent, Frontline Daily | September 23, 2026

ABUJA, Nigeria — The Central Bank of Nigeria (CBN) has cut its benchmark interest rate by 350 basis points, from 26.5% to 23%, in the largest single reduction of the Monetary Policy Rate (MPR) in the bank's history.

The decision was announced by CBN Governor Olayemi Cardoso at the conclusion of the Monetary Policy Committee's (MPC) 307th meeting, held in Abuja on 21 and 22 September 2026, with all 11 members in attendance.

"The Committee decided as follows: reset the Monetary Policy Rate to 23 per cent," Cardoso said.

Background and context;
Over the past several quarters, businesses across Nigeria have contended with a high-interest-rate environment as the CBN worked to tame inflation and stabilise the foreign exchange market. The MPR had been held at 26.5% since February 2026, following holds at both the May and July meetings, even as inflation continued to ease — slowing to 15.39% in August from 15.43% in July, according to the National Bureau of Statistics.

Key details of the policy adjustment

• Interest rate reduction: The MPR was cut by 350 basis points, from 26.5% to 23%.
• Standing Facilities Corridor: Recalibrated to +50/-300 basis points around the new MPR, down from the previous +50/-450 spread — placing the Standing Lending Facility at 23.5% and the Standing Deposit Facility at 20%.
• Cash Reserve Requirement (CRR): Retained at 45% for Deposit Money Banks, 16% for Merchant Banks, and 75% for non-TSA public sector deposits.
• Liquidity Ratio: Unchanged at 30%.

Cardoso said the move was intended to strengthen monetary policy transmission and reinforce the MPR's role as the central bank's primary policy signal, rather than a shift in its underlying stance.

What this means for citizens and the economy

For Nigerian businesses and households, the sharp rate cut signals potential relief in commercial lending rates. High borrowing costs have constrained expansion plans across manufacturing, agriculture and retail. With the MPR down to 23%, commercial banks are expected to gradually ease lending conditions, making it more affordable for enterprises to access capital, invest in infrastructure and create jobs.

Analysts note that how quickly this feeds through to retail borrowers will depend on how fast commercial banks adjust their prime lending rates — and on whether fiscal policy moves in step with the CBN's easing stance.