The Central Bank of Nigeria has cut its Monetary Policy Rate (MPR) to 23% from the longstanding 26.50%. This decision was taken at the 307th Monetary Policy Committee (MPC) meeting held on Tuesday September 22, 2026 representing a 3.5 percentage-point reduction.
The reduction brings the benchmark policy rate to its lowest level since the CBN’s recent period of aggressive monetary tightening and follows two consecutive MPC meetings at which the rate was retained at 26.5%.
The CBN MPC also voted on policy parameters as follows: Standing Facilities Corridor: Recalibrated at +50 / -300 basis points around the MPR, Cash Reserve Requirement(CRR): Retained at 45% for Deposit Money Banks, 16% for Merchant Banks, and 75% for non-TSA public sector deposits
With this recalibration, the standing facilities corridor is now narrower on the lower side than the previous +50/-450 basis-point arrangement. The CBN said the recalibration is an operational adjustment intended to strengthen monetary policy transmission and reinforce the role of the MPR as the key policy signal. R
With the MPR at 23%, the revised corridor implies a Standing Lending Facility rate of 23.5% and a Standing Deposit Facility rate of 20%, assuming the stated +50/-300 basis-point corridor is applied directly around the new MPR.
What Rate Cut Means for Borrowing
The reduction in the MPR could eventually feed through to other interest rates in the financial system, although the speed and extent of transmission will depend on market liquidity, banks’ funding costs, credit risk and other financial conditions.
The CBN has identified monetary-policy transmission as an important component of its transition toward an inflation-targeting framework. The bank says inflation targeting involves using interest rates and other monetary instruments to achieve an explicit inflation objective.
For businesses, lower market interest rates could improve the economics of borrowing for working capital and investment if commercial banks pass through the reduction. For households, the impact could be reflected in lending rates over time, although existing loan agreements may not immediately change.
