The Central Bank of Nigeria’s Monetary Policy Committee (MPC) has cut the benchmark interest rate by 50 basis points, reducing it from 27.5 percent in July to 27 percent. The decision was reached at the committee’s 302nd meeting held on September 22 and 23, 2025.

Addressing journalists after the meeting, CBN Governor Dr. Olayemi Cardoso said the move was driven by sustained disinflation over the past five months, projections of further inflation decline through year-end, and the need to support growth.

The MPC retained the asymmetric corridor around the Monetary Policy Rate (MPR) at +260 and -250 basis points, signaling its cautious approach to liquidity management. It also reduced the cash reserve requirement (CRR) for commercial banks to 45 percent, maintained 16 percent for merchant banks, and introduced a 75 percent CRR on non-TSA public sector deposits to strengthen liquidity control.

The liquidity ratio was left unchanged at 30 percent, while adjustments were made to the standing facilities corridor to improve interbank market efficiency and enhance monetary policy transmission.

Cardoso said the committee was satisfied with the prevailing macroeconomic stability, citing disinflation momentum in August—the strongest in five months—alongside improved output growth, stable exchange rates, robust external reserves, and higher crude oil production.

“Stability in the macroeconomic environment offered some headroom for monetary policy to support economic growth and recovery,” the governor said, though he noted risks posed by excess liquidity in the banking system due to rising fiscal releases.

Meanwhile, fresh data from the National Bureau of Statistics (NBS) showed Nigeria’s economy expanded by 4.23 percent year-on-year in the second quarter of 2025, the fastest pace in four years and a sharp increase from 3.48 percent in Q2 2024.

The industry sector drove growth, expanding by 7.45 percent compared to 3.72 percent in the same period last year. Agriculture grew by 2.82 percent, while services advanced 3.94 percent. Nominal GDP rose to ₦100.73 trillion in Q2 2025, up 19.23 percent from ₦84.48 trillion in Q2 2024.

The MPC said these gains, supported by exchange rate stability, moderating PMS prices, and capital inflows, helped anchor inflation expectations and created room for the modest rate cut.