The Central Bank of Nigeria has introduced a significant monetary policy adjustment, imposing a 75 percent cash reserve ratio on non‑Treasury Single Accounts. This move follows the bank’s first interest‑rate cut since 2023, announced after the 302nd Monetary Policy Committee (MPC) meeting. The Governor disclosed the details of these adjustments in a press conference on Tuesday, explaining that the committee’s decision to moderate monetary policy aims to stimulate economic growth.
The MPC reduced the policy interest rate by 50 basis points, bringing it down to 27 percent from 27.50 percent. In addition, the cash reserve ratio (CRR) for Deposit Money Banks was set at 45 percent, while Merchant Banks face a CRR of 16 percent. The asymmetric corridor was adjusted to ±250 basis points around the Monetary Policy Rate, although the liquidity ratio remained unchanged at 30 percent.
This development is notable as it marks the fifth moderation of the interest rate, the most recent prior adjustment having occurred in August when the rate fell to 21.12 percent. The introduction of a 75 percent CRR on non‑Treasury Single Accounts will affect banking sector liquidity and its capacity to extend credit.
The Central Bank’s policy changes are part of its broader effort to balance economic growth with price stability. By lowering rates and adjusting reserve requirements, the bank seeks to increase lending to key sectors, thereby promoting growth and development. As the Nigerian economy evolves, these monetary policy decisions will remain crucial in shaping the country’s economic trajectory. The MPC’s actions reflect a commitment to using monetary tools—interest rates, cash reserve ratios, and the asymmetric corridor—to maintain stability amid domestic and global economic trends, with ongoing monitoring and adjustments expected to support a stable, growing economy.
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