The Central Bank of Nigeria (CBN) has announced a 50-basis-point cut to the Monetary Policy Rate (MPR), bringing it down from 27.5% to 27%.
The decision was revealed by Governor Olayemi Cardoso after the 302nd meeting of the Monetary Policy Committee (MPC) in Abuja.
In addition, the MPC narrowed the asymmetric corridor around the MPR to +250/-250 basis points, compared to the previous +500/-100 basis points. Cardoso explained that the adjustment was intended to fine-tune liquidity management and provide clearer guidance to financial markets.
The CRR for commercial banks was set at 45%, while for merchant banks it remained at 16%. The liquidity ratio was held at 30%.
The policy shift comes as inflation slowed to 20.12% in August 2025, down from 21.88% in July, according to the National Bureau of Statistics. Nigeria’s economy also recorded 4.23% growth in Q2 2025, supported by improvements in both oil and non-oil sectors. Foreign reserves rose to nearly $42 billion, adding further confidence to monetary stability.
Cardoso acknowledged that inflation remains high but stressed that recent declines indicate past tightening measures are working. The latest easing, he noted, would consolidate gains while avoiding unnecessary strain on growth.
Private sector leaders have been urging for a more flexible stance. The Centre for the Promotion of Private Enterprise (CPPE)’s CEO, Dr Muda Yusuf, reiterated this view, urging the CBN to “Calibrate CRR and MPR downward as inflation moderates to create a more enabling credit environment. Complement monetary tightening with supply-side measures to address structural inflation drivers.”
Yusuf added that excessively tight policies had restricted affordable financing for businesses and households, limiting expansion opportunities.
