The Central Bank of Nigeria (CBN) has reduced its benchmark interest rate from 26.5 per cent to 23 per cent, marking a significant shift in the country’s monetary policy stance.
CBN Governor Olayemi Cardoso announced the decision on Tuesday, September 22, 2026, at the conclusion of the Monetary Policy Committee’s 307th meeting in Abuja.
The reduction represents a 350-basis-point cut in the Monetary Policy Rate (MPR), the rate used by the central bank as a key tool for influencing borrowing costs and broader financial conditions in the economy.
According to Cardoso, the MPC reviewed developments in both the global and domestic economies, assessed emerging risks and considered their implications for monetary policy before deciding to reset the MPR at 23 per cent.
The CBN had maintained the MPR at 26.5 per cent at its previous meetings, including the July 20–21 meeting. The rate had remained at that level since the MPC’s 50-basis-point reduction in February 2026.
The latest decision comes amid a period of easing inflationary pressure. Nigeria’s headline inflation rate fell to 15.39 per cent in August 2026, from 15.43 per cent in July, according to figures cited ahead of the MPC meeting.
In addition to reducing the MPR, the MPC retained the existing Cash Reserve Requirement (CRR) at 45 per cent for Deposit Money Banks and 16 per cent for Merchant Banks. The CRR on non-TSA public-sector deposits was also retained at 75 per cent.
The CBN’s decision represents the first major reduction in the benchmark rate since February and the largest cut reported in recent years. Bloomberg, as cited by The Guardian, described it as Nigeria’s largest interest-rate reduction in data going back to 2007.
The reduction could influence lending conditions across the financial system, although the extent and speed at which commercial banks adjust their lending rates will depend on market conditions and the transmission of monetary policy.
The MPC’s decision comes at a time when policymakers are attempting to balance the need to sustain the decline in inflation with the need to support economic activity and access to credit.
The new 23 per cent MPR now becomes the benchmark rate guiding the CBN’s monetary policy operations.