Key Takeaways:
- The CBN cut the Monetary Policy Rate to 23% at its September 2026 MPC meeting.
- The rate has returned to the 23% range for the first time since February 2024 as inflation continues to moderate.
- The apex bank retained CRR at 45% for deposit money banks and 16% for merchant banks.
Nigeria’s apex bank has cut its benchmark interest rate to 23%, marking the first return to the 23% range in about two and the half years as inflation continues to ease.
The Central Bank of Nigeria’s Monetary Policy Committee (MPC) made the decision at its 307th meeting in Abuja on Sept. 21-22, 2026, cutting the Monetary Policy Rate from 26.5% by 350 basis points.
The MPC also recalibrated the standing facilities corridor and retained existing cash reserve requirements for banks.
The CBN said the MPC voted to reset the MPR to 23%, while the Standing Facilities Corridor was recalibrated to +50/-300 basis points around the MPR.
The committee also retained the Cash Reserve Requirement at 45% for Deposit Money Banks, 16% for Merchant Banks and 75% for non-TSA public sector deposits.
CBN cuts rates as inflation moderates
The rate cut comes after several months of easing inflationary pressure. Nigeria’s headline inflation fell to 15.39% in August from 15.43% in July, according to the National Bureau of Statistics.
Food inflation also declined to 19.57% year-on-year in August.
The latest inflation figures followed a rebasing of Nigeria’s Consumer Price Index, with the National Bureau of Statistics adopting 2024 as the new base year. On the new series, August headline inflation was also significantly below the 23.14% recorded in August 2025.
The CBN had maintained the MPR at 26.5% at its May meeting after cutting it by 50 basis points from 27% in February. The February reduction was the first cut of 2026 before the rate was held at subsequent meetings.
The latest decision therefore represents a larger shift in monetary policy, with the benchmark rate now 3.5 percentage points below its previous level.
MPR returns to levels last seen in early 2024
The CBN’s historical records show that the MPR stood at 22.75% in February 2024 before the MPC raised it to 24.75% in March 2024. It was subsequently raised several times, reaching 27.5% in 2025 before easing began.
The MPR serves as the CBN’s benchmark policy rate and provides an indication of the cost of short-term funds in the banking system. Changes in the rate can influence lending and deposit rates, money-market conditions and the broader cost of borrowing.
At 23%, the policy rate remains above the latest headline inflation rate of 15.39%, leaving a positive gap between the benchmark interest rate and inflation.
