The Central Bank of Nigeria (CBN) has cut the Monetary Policy Rate (MPR) by 50 basis points, lowering it from 27.5% to 27% on September 23, 2025. This marks the first interest rate cut since the peak of the COVID-19 pandemic in 2020.
The decision was reached during the 302nd meeting of the CBN’s Monetary Policy Committee (MPC), held over two days, reflecting a cautious shift in monetary policy after years of tightening to combat inflation.
CBN Governor Olayemi Cardoso explained that the cut was predicated on five consecutive months of slowing inflation and optimistic projections showing inflation will continue to decline through the remainder of 2025.
The MPC also maintained the asymmetric corridor around the MPR at +260/-250 basis points to manage liquidity and interest rate volatility effectively.
In addition to the rate cut, the cash reserve ratio (CRR) for commercial banks was reduced from 45% to a lower level, while the CRR for merchant banks was retained at 16%. A new 75% CRR on non-Treasury Single Account (non-TSA) public sector deposits was introduced to enhance liquidity control in the banking system.
The move aims to ease credit conditions and support economic growth, balancing macroeconomic stability and price control amidst improving inflation and currency strength.