CBN has cut interest rate to 27% as inflation declined for fifth month.
NewsOnline Nigeria reports that the Central Bank of Nigeria’s Monetary Policy Committee (MPC) on Tuesday reduced the benchmark interest rate from 27.5 percent to 27 percent, marking the first cut since May 2023.
CBN Governor, Olayemi Cardoso, announced the decision at the end of the 302nd MPC meeting in Abuja, stating that the move was unanimously agreed upon by committee members following Nigeria’s inflation decline for five consecutive months.
In addition to the rate cut, the MPC adjusted the Cash Reserve Ratio (CRR) to 45 percent for Deposit Money Banks and 16 percent for Merchant Banks. The asymmetric corridor was also reviewed to +250/-250 basis points around the Monetary Policy Rate (MPR), while the liquidity ratio was retained at 30 percent.
The cut comes amid calls from manufacturers and industry stakeholders urging the apex bank to ease the MPR to lower production costs and stimulate growth.
Nigeria’s inflation eased to 21.12 percent in August 2025, while GDP grew by 4.23 percent in Q2 2025, compared to 3.13 percent in the previous quarter. Agriculture, services, industries, and the oil sector expanded, but manufacturing, trade, ICT, and motor assembly contracted.
Despite the progress, Nigeria still has one of the highest interest rates and inflation figures on the continent. In comparison, Ghana recently slashed its rate by 350 basis points to 21.5 percent with inflation at 11.5 percent, while South Africa maintains a 7 percent interest rate with 3.3 percent inflation.
