Nigeria’s Central Bank cuts its benchmark interest rate to 27 percent after months of inflation decline.
Governor Olayemi Cardoso says the move aims to stimulate economic recovery and strengthen market stability.
Nigeria’s Central Bank has lowered its benchmark interest rate to 27 per cent, ending a string of hikes designed to tackle inflation. The Monetary Policy Committee (MPC) approved the 50 basis-point cut on Tuesday.
Governor Olayemi Cardoso said the decision followed five months of steady declines in inflation, expectations of further easing for the rest of 2025, and the need to boost economic recovery efforts.
The benchmark rate, called the Monetary Policy Rate (MPR), guides lending costs and overall economic activity. Alongside the rate cut, the MPC adjusted other key policy tools. It narrowed the asymmetric corridor around the MPR to +250/-250 basis points, reduced the Cash Reserve Ratio (CRR) for commercial banks from 50 per cent to 45 per cent, and kept the CRR for merchant banks at 16 per cent. The liquidity ratio stayed at 30 per cent.
The committee also introduced a 75 per cent CRR on non-TSA public sector deposits to improve liquidity management and fine-tuned standing facilities to enhance the interbank market.
MPC members welcomed recent economic stability reflected in slowing inflation, improved growth, stable exchange rates and stronger reserves. They noted that disinflation gained pace in August 2025, marking the highest improvement in five months.
Headline inflation fell to 20.12 per cent in August from 21.88 per cent in May, helped by lower energy costs and a steadier foreign exchange market. Nigeria’s economy expanded by 4.23 per cent in the second quarter of 2025, compared with 3.48 per cent in the same period last year, driven by higher oil output, stronger non-oil exports and reduced imports.
The next policy meeting of the MPC will take place on 24 and 25 November.
