Central Bank of Nigeria cuts benchmark interest rate to 23%

The Central Bank of Nigeria (CBN) has implemented a significant 350-basis-point reduction in its Monetary Policy Rate (MPR), lowering it from 26.5% to 23%. This move, approved during the Monetary Policy Committee meeting on September 21–22, 2026, represents a major shift in the country's monetary policy stance following a period of tight conditions aimed at controlling inflation.

While the rate cut aims to ease financial conditions and stimulate credit, experts note that the impact on commercial lending may be limited. The CBN maintained the Cash Reserve Requirement (CRR) for commercial banks at 45%, a move that continues to constrain the liquidity available for bank lending. Consequently, while money-market rates and Treasury bill yields have begun to decline, manufacturers and business leaders warn that actual borrowing costs for the real sector may remain high.

In the broader financial market, banking system liquidity has risen to N7.45 trillion, contributing to a decline in overnight and interbank rates. Additionally, the CBN's Treasury bill auctions for the third quarter of 2026 saw total allotments of approximately N8.14 trillion, significantly exceeding the initial target of N5.8 trillion.