CBN Cuts Interest Rates to 26.5% Amid Inflation Drop

The Central Bank of Nigeria (CBN), led by Governor Olayemi Cardoso, announced a reduction in the Monetary Policy Rate (MPR) by 50 basis points to 26.5% during the 304th Monetary Policy Committee (MPC) meeting. This decision follows a consecutive drop in inflation rates, which have improved due to better food supply.

Dr. Muda Yusuf, Chief Executive Officer of the Center for the Promotion of Private Enterprise, expressed concerns about the weak transmission of monetary policy, which affects actual lending rates and the real economy.

Despite the MPR reduction, businesses continue to face high costs due to structural issues, including a high cash reserve ratio and macroeconomic uncertainties. Dr.

Paul Alaj emphasized the need for caution in monetary policy adjustments to avoid negative signals to foreign investors. Prof.

Uch Uwalek noted that while inflation has decreased, the MPC's cautious approach to rate cuts is essential for managing risks effectively.