CBN Governor Cardoso Announces Major Rate Cut in Thailand

Olayemi Cardoso, the Governor of the Central Bank of Nigeria (CBN), stated that improved economic conditions and enhanced coordination between fiscal and monetary authorities enabled the CBN to reduce interest rates by 350 basis points in September. This decision, which lowered the Monetary Policy Rate (MPR) from 26.5 percent to 23 percent, was made during the IMF and World Bank meetings in Bangkok, Thailand.

Cardoso noted that Nigeria's external reserves had reached their highest level in 18 years, inflation was consistently declining, and economic growth was stable. He emphasized that the fiscal and monetary authorities had signed a memorandum of understanding (MoU) to ensure alignment on policy direction.

The rate cut aimed to address weaknesses in the monetary policy transmission mechanism, which had become increasingly problematic. Cardoso also introduced an overnight financing rate to clarify actual interest rates in the financial system, asserting that the CBN had sufficient economic buffers to support this adjustment.