CBN Cuts MPR to 23% From 26.5% as MPC Signals Major Policy Shift

The Central Bank of Nigeria (CBN) has reduced the Monetary Policy Rate (MPR) from 26.5% to 23%, marking its biggest interest rate cut in years as the Monetary Policy Committee (MPC) signalled a new phase in Nigeria’s monetary policy. The decision was reached at the 307th MPC meeting held in Abuja on Tuesday, September 22, 2026, with all 11 committee members in attendance.

The 350-basis-point reduction comes just two months after the MPC voted in July to retain the benchmark rate at 26.5%, reflecting growing confidence that inflationary pressures have moderated enough to begin easing borrowing costs while maintaining macroeconomic stability.

Alongside the rate cut, the Committee recalibrated the Standing Facilities Corridor around the new MPR to +50/-300 basis points. That adjustment places the Standing Lending Facility at 23.5% and the Standing Deposit Facility at 20%, providing new benchmarks for overnight lending and deposits within Nigeria’s banking system.

The MPC, however, chose to retain existing Cash Reserve Requirement (CRR) levels across the banking sector. Deposit Money Banks will continue to maintain a 45% CRR, Merchant Banks remain at 16%, while the CRR for non-Treasury Single Account public sector deposits stays at 75%, indicating that the CBN is easing interest rates without loosening its broader liquidity controls.

The policy shift comes against the backdrop of improving inflation data. According to the National Bureau of Statistics, Nigeria’s headline inflation stood at 15.39% in August 2026, meaning the newly adopted 23% MPR remains comfortably above the inflation rate, a position that preserves a positive real interest rate while giving the CBN more room to stimulate economic activity.

The MPR serves as the anchor for interest rates across the Nigerian economy, influencing commercial bank lending, mortgage rates, business financing and returns on fixed-income investments. A lower benchmark rate typically encourages borrowing and investment, although economists caution that sustained monetary easing must be carefully balanced against the risk of renewed inflation if demand accelerates too quickly.

For businesses, the decision could translate into gradually cheaper access to credit, particularly for manufacturers, small and medium-sized enterprises and sectors seeking long-term financing. Investors will also be watching how commercial banks adjust lending rates and how the reduction reshapes yields in Nigeria’s government securities market over the coming months.

The MPC’s decision marks a significant turning point in Nigeria’s post-inflation policy cycle. After prioritizing aggressive tightening to tame rising prices, the CBN is now attempting a more delicate balancing act, supporting economic growth while ensuring inflation remains on a sustainable downward path. The success of that strategy will likely define the trajectory of Nigeria’s economy well into 2027.