CBN Cuts Interest Rate To 27%, Adjusts Banks’ Cash Reserve

The Central Bank of Nigeria’s (CBN) Monetary Policy Committee (MPC) has reduced the benchmark interest rate to 27 per cent, down from 27.5 per cent in July, in its latest effort to stabilise the economy.

Naija News reports that the Committee also announced fresh adjustments to banks’ cash reserve obligations.

The MPC cites continued disinflation and a positive outlook for the economy for the latest review.

The decision was taken at the Committee’s 302nd meeting held on September 22 and 23, 2025, with all 12 members voting in favour of the adjustment.

In line with the new policy stance, the Cash Reserve Requirement (CRR) for commercial banks was reduced to 45 per cent, while that of merchant banks was retained at 16 per cent.

The MPC also introduced a 75 per cent CRR on non-TSA public sector deposits, a move the apex bank said was aimed at tightening controls around idle public funds.

Meanwhile, the liquidity ratio was left unchanged at 30 per cent.

Briefing journalists after the meeting, CBN Governor, Olayemi Cardoso, said the rate cut was informed by positive economic signals.

“The committee’s decision to lower the monetary policy rate was predicated on the sustained disinflation recorded in the past five months, projections of declining inflation for the rest of 2025, and the need to support economic growth,” Cardoso said.

He added that the asymmetric corridor around the MPR was retained at +260 and -250 basis points, which would continue to provide a framework for liquidity management and signal the Bank’s cautious stance toward market volatility.

The CBN stressed that the latest adjustments were designed to consolidate gains in taming inflation while ensuring credit expansion for the productive sectors of the economy.

Naija News understands that the MPC will reconvene in November to review the impact of these measures on inflation, growth, and financial stability.