The Central Bank of Nigeria’s (CBN) Monetary Policy Committee (MPC) has lowered the benchmark interest rate from 26.5% to 23%, signalling a shift in the apex bank’s inflation-fighting stance after its 307th meeting in Abuja on Tuesday.
Eleven members of the Committee attended the session, which also recalibrated the Standing Facilities Corridor to +50/-300 basis points around the MPR.
The Cash Reserve Requirement was left unchanged at 45 per cent for Deposit Money Banks, 16 per cent for Merchant Banks, and 75 per cent for non-TSA public sector deposits.
CBN Governor, Mr Olayemi Cardoso, who announced this while briefing journalists shortly after the MPC meeting on Tuesday in Abuja, said the Committee described the move as an operational adjustment rather than a shift in policy direction.
According to him, the recalibration was intended “to enhance the effectiveness of monetary policy and support the transition to an inflation targeting framework,” and members stressed it “should not, in itself, be construed as a change in the underlying policy stance.”
The MPC pointed to a stretch of improving indicators to justify the timing. The balance of payments surplus rose to $3.51 billion in the second quarter of 2026, up from $2.38 billion in the first quarter, while the current account surplus climbed to $7.54 billion, an increase of nearly 68 per cent quarter on quarter.
Inflation also continued to ease. Headline inflation slowed to 15.39 per cent in August, down marginally from 15.43 per cent in July, marking a third straight monthly decline. Food inflation fell to 19.57 per cent from 20.31 per cent, and core inflation dropped to 13.29 per cent from 14.97 per cent. The Committee noted this extended a run of twenty consecutive months of moderation in the 12-month moving average inflation rate.
On growth, the economy expanded by 4.43 per cent in the second quarter, up from 3.89 per cent in the first, with both the oil and non-oil sectors contributing to the acceleration.
The Purchasing Managers’ Index rose to 52.7 points in August from 51.1 in July, signaling continued expansion.
External reserves reached $55.25 billion as of September 18, described in the communique as the highest level in eighteen years, enough to cover roughly 11.3 months of import needs.
The Committee also welcomed a new Memorandum of Understanding between the Federal Ministry of Finance and the CBN aimed at strengthening fiscal and monetary policy coordination, along with the completion of the banking sector’s recapitalisation programme, which it said had improved banks’ capital buffers and lending capacity.
Looking ahead, the MPC said it expects inflation to continue moderating, supported by exchange rate stability and an improving food supply as the harvest season progresses.
It flagged prolonged Middle East tensions and election-related spending as potential upside risks to the outlook.
The Committee said it would monitor the recalibrated interest rate corridor closely and reaffirmed that future decisions “remain data dependent” in pursuit of sustained disinflation.
The MPC’s next meeting is scheduled for November 23 and 24, 2026.
