The Central Bank of Nigeria (CBN) has reduced the Monetary Policy Rate (MPR) from 26.5 percent to 23 percent.
Announcing the decision at the conclusion of the 307th Monetary Policy Committee (MPC) meeting in Abuja, Governor Olayemi Cardoso described the move as a necessary adjustment to reflect current financial market realities.
Governor Cardoso also revealed that the MPC recalibrated the standing facilities’ corridor to +50/-300 basis points around the MPR, while maintaining the Cash Reserve Requirement (CRR) at 45 percent for Deposit Money Banks, 16 percent for Merchant Banks, and 75 percent for non-Treasury Single Account (TSA) public sector deposits.
He clarified that these changes represent an operational realignment to strengthen the transmission of monetary policy and reinforce the importance of the MPR. Cardoso emphasized that the new corridor does not signify a shift in the overall monetary policy stance, but rather aims to enhance the effectiveness of policy operations and support the transition to an inflation-targeting framework.
According to the governor, the committee considered the recalibration appropriate given the macroeconomic environment, which remains supportive of such adjustments without jeopardizing the ongoing disinflation process. The MPC noted that a growing divergence between the MPR and prevailing market rates had weakened policy transmission. The bank’s recent reforms—including adopting the NOFA as a transaction-based operational benchmark—have improved the transparency of money market operations. Resetting the MPR and policy corridor is intended to better align the policy framework with market realities and restore the MPR as the central signal of monetary policy.
Governor Cardoso added that with the market currently stable, this was the opportune time for a reset. “We are in a position of stability. The tightening we have done in the past has worked. FX pressure has receded. Capital market growth is because of the FX market stability. Investor confidence has come back. We have nothing to fear. This is a reset and a recalibration. No better time to do it than now when things are stable.”
He noted that previous tightening measures have boosted Nigeria’s economic resilience, evidenced by moderating inflation, robust external reserves, improved external sector fundamentals, and stronger investor confidence. As of September 18, 2026, Nigeria’s Gross External Reserves stood at $55.25 billion—the highest in 18 years—sufficient to finance around 11.3 months of imports.
Marking his third anniversary as CBN governor, Cardoso highlighted his team’s achievements, including stabilizing the exchange rate through the unification policy.
He pointed out that, prior to his tenure, combined fuel and exchange subsidies accounted for as much as 5 percent of GDP—an unsustainable burden. Reforms introduced under his leadership, such as rebuilding external reserves, successful bank recapitalization, and increased Diaspora remittances, have helped place the economy on a more stable footing.
