The Central Bank of Nigeria (CBN) has reduced the Monetary Policy Rate (MPR) by 50 basis points, lowering it from 27.5 per cent in July to 27 per cent. The decision was reached at the 302nd Monetary Policy Committee (MPC) meeting held on September 22 and 23, 2025.
The Committee also retained the asymmetric corridor around the MPR at +260 and -250 basis points, signaling its cautious approach to market volatility. Cash Reserve Requirements (CRR) were revised, with commercial banks’ ratio cut to 45 per cent, merchant banks retained at 16 per cent, and a new 75 per cent CRR imposed on non-TSA public sector deposits.
CBN Governor Olayemi Cardoso explained that the rate cut followed sustained disinflation over the past five months, projections of further inflation decline through 2025, and the need to support economic recovery. He added that moderation in petrol prices and improved crude oil production had strengthened the disinflationary trend.
The MPC left the liquidity ratio unchanged at 30 per cent but widened the standing facilities corridor to boost interbank market efficiency and strengthen policy transmission.
Committee members highlighted the stability of key macroeconomic indicators, including exchange rate stability, robust external reserves, and improved output growth. “The stability in the macroeconomic environment offered some headroom for monetary policy to support economic growth and recovery,” the MPC stated.
Nigeria’s external reserves recently climbed above $42 billion, the highest in six years, while GDP grew by 4.23 per cent in the second quarter of 2025, compared to 3.48 per cent in Q2 2024. The industry sector grew by 7.45 per cent, agriculture by 2.82 per cent, and services by 3.94 per cent, underscoring a broad-based recovery.
The CBN stressed that curbing excess liquidity in the banking system remains a priority, warning that fiscal releases from higher revenues could fuel inflation if unchecked.
