CBN Cuts Monetary Policy Rate, Banks Slow to Adjust Lending

The Central Bank of Nigeria (CBN) reduced its Monetary Policy Rate (MPR) from 26.5 percent to 23 percent on September 22, 2026, marking a 350 basis point cut, the largest since December 2006. CBN Governor Olayemi Cardoso announced this adjustment during the Monetary Policy Committee (MPC) meeting held on September 21-22, 2026.

Despite this significant reduction, Nigerian banks have not yet lowered their lending rates, leaving businesses and households awaiting the anticipated decrease in borrowing costs. The CBN retained the Cash Reserve Ratio (CRR) at 45 percent for deposit money banks, 16 percent for merchant banks, and 75 percent for non-TSA public-sector deposits.

Some banks are still evaluating the impact of the new benchmark before adjusting their loan-pricing structures. Dr Muda Yusuf, from the Centre for the Promotion of Private Enterprise, emphasized the need for banks to reflect the new monetary policy in their credit pricing to enhance investment and economic growth.

Financial analyst Jerry Igwilo noted that while borrowers might expect some reduction in loan costs, the extent would depend on individual risk assessments.