JUST IN: CBN Slashed Interest Rate to 27%, Cardoso Gives Reasons

The Central Bank of Nigeria (CBN) has reduced the benchmark interest rate from 27.50% to 27%, the first cut since May 2023.

Announcing the decision after the 302nd Monetary Policy Committee (MPC) meeting in Abuja on Tuesday, CBN Governor Olayemi Cardoso said the move was driven by Nigeria’s sustained inflation decline over the past five months.

Cash Reserve Ratio (CRR): 45% for Deposit Money Banks, 16% for Merchant Banks.

It also adjusted the asymmetric corridor: at +250/-250 basis points around the MPR.

The committee retained the liquidity ratio, LR, at 30 percent.

Cardoso noted that the cut was also influenced by calls from industry stakeholders and manufacturers seeking relief from high borrowing costs to reduce production expenses.

Nigeria’s inflation eased to 21.12% in August, marking the fifth consecutive month of moderation, while GDP growth improved to 4.23% in Q2 2025 from 3.13% in Q1.

However, despite the rate cut, Nigeria still records one of the highest interest rates and inflation levels in Africa. For comparison:

Ghana: Interest rate 21.5%, inflation 11.5%, South Africa: Interest rate 7%, inflation 3.3%.

Cardoso emphasized that the CBN remains cautious but optimistic, stressing that monetary easing must be balanced with the goal of sustaining price stability.