CBN Slashes Interest Rate to 23% as Inflation Eases

The Central Bank of Nigeria (CBN) has cut the benchmark Monetary Policy Rate (MPR) 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 at the end of the Monetary Policy Committee’s 307th meeting in Abuja.

Cardoso said the committee resolved to “reset the monetary policy rate to 23 per cent.”

The latest decision follows two consecutive MPC meetings at which the committee kept the rate unchanged. It also comes after a 50-basis-point reduction announced in February 2026.

The rate cut comes amid a continued moderation in Nigeria’s inflation rate. According to the National Bureau of Statistics, headline inflation eased to 15.39 per cent in August 2026, from 15.43 per cent in July. The August figure represents the latest decline in the inflation rate.

The CBN’s decision marks a major reduction in the cost benchmark that influences lending and other interest rates across the financial system. The impact on borrowing costs, however, will depend on how commercial banks and other financial institutions transmit the policy change to customers.

The MPC’s move also comes against the backdrop of efforts to balance inflation control with economic growth. The CBN has previously used changes in the MPR as one of its key tools for influencing liquidity, credit conditions and inflation expectations.

The latest decision is expected to draw attention from businesses, investors and households, particularly borrowers who have faced elevated interest rates. Its broader effects will depend on developments in inflation, exchange rates, credit conditions and other economic indicators in the months ahead.