The Monetary Policy Committee of the Central Bank of Nigeria has
reduced the interest rate to 27 per cent, the first cut in 2025 after three
consecutive pauses.
CBN Governor Olayemi Cardoso announced the decision on Tuesday
in Abuja at the end of the 302nd MPC meeting held on September 22
and 23, 2025.
Cardoso said the committee reduced the interest rate by 50 basis
points, adjust the Standing Facilities corridor to +250/-250 basis points,
raise the Cash Reserve Requirement, CRR, for commercial banks to 45
per cent but retained that of merchant banks at 16 per cent.
The committee also introduced a 75 per cent CRR on non-TSA public
sector deposits while the Liquidity Ratio was left unchanged at 30 per
cent.
According to him, the rate cut was justified by sustained disinflation
recorded in the past five months, projections of declining inflation for the
rest of 2025, and the need to support economic recovery efforts.
The MPC noted that headline inflation moderated to 20.12 per cent in
August from 21.88 per cent in July, while food inflation dropped to
21.87 per cent from 22.74 per cent.
The committee commended the Federal Government’s efforts to
improve security in oil-producing regions, stressing that sustained
production growth will support external reserves and foreign exchange
stability.
Recall that the last time the CBN cut its benchmark interest rate was in
September 2020, five years ago, when it lowered the Monetary Policy
Rate from 12.5 per cent to 11.5 per cent.
Chidozie Chima | September 27, 2024
