CBN Lowers Interest Rate to 27%
The Central Bank of Nigeria (CBN) has trimmed its benchmark interest rate, cutting the Monetary Policy Rate (MPR) from 27.5% to 27%, in a move aimed at bolstering economic growth amid signs of easing inflation.
CBN Governor Olayemi Cardoso announced the decision during a press briefing in Abuja on Tuesday, following the 302nd meeting of the bank’s Monetary Policy Committee (MPC). The rate cut marks a 50 basis point reduction and reflects the MPC’s confidence in the country’s improving macroeconomic conditions.
The MPR serves as the benchmark for other interest rates within the Nigerian financial system and is a key tool used by the CBN to manage inflation and stimulate the economy.
Cardoso explained that all 12 MPC members unanimously voted in favor of the rate cut, citing a continued slowdown in inflation. Nigeria’s inflation rate stood at 20.33% in August 2025 its lowest level in months supporting the committee’s decision to ease monetary policy.
Governor Cardoso emphasized that the rate adjustment is part of broader efforts to sustain economic recovery, highlighting improvements in several key indicators. These include a stable exchange rate, increasing capital inflows, a surplus current account balance, and strengthening external reserves.
He noted that the committee was particularly encouraged by the pace of disinflation in August — the most significant monthly decline in five months. The drop in inflation has been attributed to tighter monetary policy, exchange rate stability, higher crude oil production, and lower petrol prices.
“With the prevailing macroeconomic stability, the MPC saw room for monetary policy to begin supporting economic growth more actively,” Cardoso stated.
The decision underscores a shift in policy focus from aggressive inflation containment to supporting broader economic expansion as Nigeria continues its post-pandemic recovery.
