BREAKING: CBN Cuts Interest Rate to 23%

The Central Bank of Nigeria (CBN) has cut the Monetary Policy Rate (MPR) from 26.50% to 23.00%, a 350-basis-point reduction, following its Monetary Policy Committee meeting on September 21–22, 2026. 

The decision marks a significant shift in Nigeria’s monetary policy stance after the CBN kept the MPR at 26.50% at its previous two meetings. 

The latest decision comes amid continued moderation in inflation. Nigeria’s headline inflation fell slightly from 15.43% in July to 15.39% in August 2026, while food inflation also moderated. 

The CBN also adjusted the Standing Facilities Corridor to +50/-300 basis points around the MPR, while maintaining the Cash Reserve Ratio at 45% for Deposit Money Banks, 16% for Merchant Banks and 75% for non-TSA public-sector deposits. 

What the 23% MPR means

The rate cut could eventually:

• Reduce borrowing costs for businesses and consumers, although commercial banks may not immediately pass on the full reduction.
• Encourage investment and economic activity by making credit cheaper.
• Put downward pressure on Treasury bill and bond yields as market rates adjust.
• Potentially make equities more attractive relative to fixed-income investments if yields decline.
• Test the CBN’s ability to maintain naira stability, because lower Nigerian interest rates can reduce the yield advantage of naira assets.

The move comes after several months of declining inflation and relative stability in the foreign-exchange market. 

In simple terms: the CBN is signalling that inflation has fallen sufficiently for it to begin easing the very tight monetary conditions that have prevailed in Nigeria.