BREAKING: CBN Cuts Interest Rate to 27% in First Monetary Easing Since 2023

The Central Bank of Nigeria (CBN) has lowered its benchmark interest rate for the first time in more than three years, cutting the Monetary Policy Rate (MPR) from 27.5% to 27%.

CBN Governor, Olayemi Cardoso, announced the decision on Tuesday after the conclusion of the bank’s 302nd Monetary Policy Committee (MPC) meeting in Abuja. He said the unanimous vote by MPC members was influenced by Nigeria’s moderating inflation, which has declined for five consecutive months.

Monetary adjustments unveiled

Alongside the rate cut, the MPC also adjusted the Cash Reserve Ratio (CRR) to 45% for Deposit Money Banks and 16% for Merchant Banks. The asymmetric corridor was reviewed to +250/-250 basis points around the MPR, while the Liquidity Ratio (LR) was retained at 30%.

The move comes after repeated calls from manufacturers and business leaders for lower rates to ease the rising cost of production and stimulate growth.

Economy showing signs of recovery

Nigeria’s headline inflation slowed to 21.12% in August, continuing a downward trend, while GDP expanded by 4.23% in the second quarter of 2025 compared with 3.13% in the previous quarter. Growth was recorded in agriculture, services, industries, and oil, though sectors like manufacturing, ICT, trade, and motor assembly contracted.

This marks the first CBN rate cut since May 2023, when the MPR was reduced from 18% to 17.5%.

Nigeria still lags regional peers

Despite the easing, Nigeria’s interest and inflation rates remain among the highest in Africa. Ghana recently slashed its policy rate by 350 basis points to 21.5%, with inflation at 11.5%. South Africa’s benchmark rate stands at 7%, with inflation at 3.3%.

Analysts say the latest cut signals the CBN’s intent to balance inflation control with growth, but stress that structural challenges in manufacturing and trade still weigh heavily on Africa’s largest economy.