CBN Cuts MPR to 23%, Banks Slow to Adjust Lending Rates

Nigerian banks have not reduced lending rates nearly a week after the Central Bank of Nigeria (CBN) cut the Monetary Policy Rate (MPR) by 350 basis points on September 22, 2026, from 26.5% to 23%. This adjustment, the largest in nearly two decades, aims to recalibrate the MPR as the effective benchmark for market interest rates.

Despite expectations for lower borrowing costs, current lending rates remain high, ranging from about 20% to 46%, influenced by customer risk profiles and funding costs. Several banks are still evaluating the implications of the CBN's decision.

A senior official at a Tier 1 Bank indicated no immediate plans to revise lending rates, while another Tier 1 bank stated that changes would depend on its Asset-Liability Committee. Economic experts, including Dr. Muda Yusuf and Dr. Jerry Igwilo, emphasize that the effectiveness of the CBN's policy will depend on how quickly banks adjust their lending rates to reflect the new MPR.