CBN Warns of Excess Liquidity Risks, Cuts MPR to 27%
The CBN has expressed concerns about the negative effects of monthly Federation Account Allocation Committee (FAAC) releases on excess liquidity in the banking system, potentially posing risks to price stability. Despite these concerns, the MPC lowered the MPR by 50 basis points to 27%, marking the first cut of the year.
The policy decision also included adjustments to the Cash Reserve Ratio for commercial and merchant banks. The CBN's cautious easing stance is supported by steady macroeconomic improvements, including a slowdown in headline inflation and GDP expansion in Q2 2025.
The move aims to balance liquidity management while ensuring economic stability and growth.
Plus234Feed summary based on reporting from NairaMetrics. Read the original report below.
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