CBN Lowers Monetary Policy Rate to 23% to Align with Markets

The Central Bank of Nigeria (CBN) has announced a reset of the Monetary Policy Rate (MPR) from 26.5% to 23%, citing a disconnect between the previous rate and actual market rates. This decision, made during the Monetary Policy Committee's (MPC) 307th meeting in Abuja, is characterized as an operational realignment rather than conventional monetary policy easing.

The CBN identified weak monetary policy transmission as a key issue, noting that while the MPR was at 26.5%, the interbank rate was approximately 22%. The adjustment aims to restore the MPR as the primary monetary policy signal and strengthen its transmission.

The MPC also recalibrated the Standing Facilities Corridor to +50/-300 basis points around the new MPR while maintaining existing Cash Reserve Requirement levels. The CBN indicated that the reset is part of broader financial-market reforms, supported by improvements in Nigeria's macroeconomic fundamentals, including a Balance of Payments surplus of US$3.51 billion in Q2 and external reserves of US$55.25 billion as of September 18, 2026.