The Central Bank of Nigeria’s Monetary Policy Committee announced a 50‑basis‑point cut to the policy interest rate, lowering it from 27.5 percent to 27 percent. The decision was taken at the committee’s 302nd meeting on 22‑23 September 2025. After the meeting, CBN Governor Dr. Olayemi Cardoso told journalists that the reduction was driven by five months of sustained disinflation and projections of further inflation declines for the rest of 2025, with the aim of supporting economic growth amid current inflation trends.
In addition to the rate cut, the cash reserve requirement (CRR) for commercial banks was reduced to 45 percent, while the CRR for merchant banks remains at 16 percent. A new 75‑percent CRR was introduced for non‑Treasury Single Account (TSA) public‑sector deposits to improve liquidity management, and the overall liquidity ratio stayed unchanged at 30 percent. The committee also adjusted the standing‑facilities corridor to enhance banking‑market efficiency and strengthen monetary‑policy transmission, steps expected to bolster financial‑system stability.
The MPC expressed satisfaction with the prevailing macro‑economic stability, citing sustained disinflation, stronger output growth, a stable exchange rate, and robust external reserves. It highlighted the accelerated disinflation observed in August 2025—the highest rate in five months—attributing this to monetary‑policy tightening, exchange‑rate stability, and a growing capital‑inflow surplus in the current‑account balance, which have helped anchor inflation expectations. Additional contributors to the slowdown include continued moderation in premium motor spirit (PMS) prices and a notable rise in crude‑oil production.
The committee views the current macro‑economic stability as providing some headroom for monetary policy to support growth and recovery. The Central Bank’s decision to cut the interest rate and adjust other policy tools reflects its commitment to balancing price stability with the need to foster economic expansion. As Nigeria navigates ongoing inflation and growth challenges, the MPC’s actions will be closely monitored for their impact on businesses, investors, consumers, and the broader economic landscape in the months ahead.
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