The Governor of the Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso, has announced a reduction of the interest rate from 26.5 per cent to 23 per cent.
Addressing the media after the 307th meeting of the Monetary Policy Committee (MPC) in Abuja on Tuesday, Mr. Cardoso, said that the committee, in arriving at new rate, examined recent trends in the global and domestic economic environment.
According to him, the committee considered emerging risks to the outlook and evaluated their potential implications for monetary policy.
He explained that the 11 members of the committee were in attendance and resolved to reset the monetary policy rate at 23%.
“Two, recalibrate the standing facilities corridor to plus 50 to minus 300 basis points around the MPC, retain the cash reserve requirement for deposit money banks at 45%, merchant banks at 16%, and non-TSA public sector deposits at 75%,” he said.
Cardoso stated that the Committee decided to reset the MPR and recalibrate the policy corridor as an important operational realignment aimed at strengthening monetary policy transmission and reinforcing the primacy of the Monetary Policy Committee.
“The MPC emphasized that the recalibration of the corridor does not constitute a change in the current monetary policy stance, but rather an operational reset to enhance the effectiveness of monetary policy and support the transition to an inflation-targeting regime.
“Members are of the view that the current macroeconomic environment remains supportive of such a recalibration without undermining the disinflation process. Considerations In arriving at this decision, the Committee noted that the observed divergence between the MPR and the prevailing market rates had weakened the effectiveness of monetary policy transmission,” he said.
According to local media reports, the Members of the MPC noted that the bank’s ongoing repair of the monetary policy implementation framework, including the adoption of NOFR as a transaction-based operational benchmark, has improved the transparency of money market operations.
“The NPC broadly observed the increasing resilience demonstrated by the Nigerian economy reflected by the moderating inflation, robust external reserve buffers, improved external sector fundamentals and strengthening investor confidence.
“Members acknowledged the considerable improvement in the balance of payment surplus of US$3.51 billion in Q2 2026 compared with US$2.38 billion in Q1 2026,” Cardoso said.
The Governor said that the CBN reforms had also lowered inflation, stating that “the economy has stabilised and it is on the path to growth”.
GIK/APA