The Central Bank of Nigeria (CBN)’s Monetary Policy Committee has reduced the interest rate by 50 basis points, from 27.5% in July to 27 percent.
This followed the decision of the 12 members of the Committee at its 302nd meeting held on September 22nd and 23rd, 2025.
The asymmetric corridor around the Monetary Policy Rate (MPR) was retained at +260 and -250 basis points, providing a framework for liquidity management and signaling the CBN’s cautious approach toward market volatility.
CBN Governor, Olayemi Cardoso, who briefed journalists after the meeting, said the committee’s decision to lower the MPR was predicated on the sustained disinflation recorded in the past five months, projections of declining inflation for the rest of 2025, and the need to support economic inflation records.
The Committee also reduced the cash reserve requirement to 45% for commercial banks and retained that of merchant banks at 16%. It has also introduced a 75% cash reserve requirement on non-TSA public sector deposits for enhanced liquidity management.
To improve the efficiency of the bank market and strengthen monetary policy transmission, the MPC also adjusted the standing facilities corridor
Meanwhile, the liquidity ratio has been left unchanged at 30 percent.
The MPC expressed satisfaction with the prevailing macro-economic stability evidenced by the improvements in several indicators such as sustained disinflation, improved output growth, stable exchange rate, and robust external reserves.
Nigeria’s Gross Domestic Product (GDP) grew by 4.23 percent on a year-on-year basis in the second quarter of 2025, according to data released by the National Bureau of Statistics (NBS) on Monday.
The latest figures showed an improvement from the 3.48 percent growth recorded in the same quarter of 2024, indicating continued recovery and resilience in the economy.
