# Monetary policy and lending rate shifts in Nigeria

> Live situation record from CLSTR: https://clstr.news/situations/monetary-policy-and-lending-rate-shifts-in-nigeria
> Updated: 2026-09-22T11:36:23.000Z. Sources: 32. Developments: 2.

In Nigeria, banking lending rates have begun to decline following a reduction in the Monetary Policy Rate (MPR). In August 2026, the average maximum lending rate in Nigeria dropped to 29.19 percent from 33.16 percent in July, following a policy rate reduction to 26.50 percent. The International Monetary Fund has characterized Nigeria’s borrowing rate trends as a “rockets-and-feathers” pattern, where rates rise quickly during tightening but fall gradually during easing.

On September 22, 2026, the Central Bank of Nigeria (CBN) further reduced the benchmark MPR by 350 basis points, bringing it down to 23 percent. Announced following the 307th Monetary Policy Committee meeting in Abuja, Governor Olayemi Cardoso described the move as an “operational reset” designed to strengthen monetary policy transmission and support a transition toward an inflation-targeting framework, rather than a shift toward an easing stance.

This adjustment aims to close the gap between the official MPR and prevailing market rates, such as interbank and Standing Deposit Facility rates, which had been trading significantly lower. As part of this realignment, the bank recalibrated the Standing Facilities Corridor to +50/-300 basis points around the MPR, setting the Standing Lending Facility at 23.5 percent and the Standing Deposit Facility at 20 percent. The Cash Reserve Requirement (CRR) remains unchanged at 45 percent for deposit money banks, 16 percent for merchant banks, and 75 percent for non-TSA public sector deposits.

The decision follows a moderation in headline inflation, which fell to 15.39 percent in August. While the cut aims to support economic activity, analysts have raised concerns regarding inflation sustainability due to anticipated pre-election spending and rising global oil prices. Additionally, analysts suggest the rate cut may drive investor rotation from fixed-income securities into the equities market as lower borrowing costs increase the attractiveness of stocks.

## Claims

- The Central Bank of Nigeria reduced the Monetary Policy Rate (MPR) from 26.5% to 23%. (disputed by 18 sources)
- The decision followed the conclusion of the 307th Monetary Policy Committee meeting on Tuesday, September 22. (corroborated by 16 sources)
- The Cash Reserve Requirement (CRR) was retained at 45 per cent for deposit money banks. (corroborated by 13 sources)
- The Monetary Policy Committee decided to calibrate the standing facility around the MPR to +50/-300 basis points. (corroborated by 10 sources)
- Nigeria's headline inflation was 15.39% in August 2026, compared to 15.43% in July. (corroborated by 7 sources)
- The decision was described as an operational reset to enhance the effectiveness of monetary policy. (corroborated by 5 sources)
- Losses from multiple foreign exchange windows amounted to approximately 3% of Nigeria's GDP. (single source)

## Timeline

### 2026-09-22: Central Bank of Nigeria cuts benchmark interest rate to 23%

The Central Bank of Nigeria cut its benchmark interest rate by 350 basis points to 23%, citing moderating inflation and a need to improve monetary policy transmission through an operational reset.

30 sources. https://clstr.news/cluster/central-bank-of-nigeria-cuts-interest-rate-to-23

### 2026-09-20: Banking lending rates decline in Nepal and Nigeria

Lending interest rates are declining in Nepal and Nigeria, driven by excess liquidity in Nepal and monetary policy adjustments in Nigeria.

3 sources. https://clstr.news/cluster/banking-lending-rates-decline-in-nepal-and-nigeria

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Cite as: Monetary policy and lending rate shifts in Nigeria. CLSTR, https://clstr.news/situations/monetary-policy-and-lending-rate-shifts-in-nigeria