CBN Lowers Monetary Policy Rate to 23% Impacting Investments

The Central Bank of Nigeria (CBN) reduced its Monetary Policy Rate (MPR) from 26.5% to 23% during the Monetary Policy Committee's (MPC) 307th meeting on September 22, 2026. This 350-basis-point cut is the first adjustment since February and indicates a significant shift in the interest-rate environment.

The decision comes as Treasury bill yields have begun to decline, and inflation has moderated, suggesting a transition away from the high-yield fixed-income environment of 2024 and 2025. For mutual funds and pension funds, this rate cut may initiate a portfolio transition cycle, with fixed-income returns expected to moderate and equities gaining importance for overall performance.

As of June 2026, approximately N17.40 trillion of pension fund assets were invested in FGN securities. Samuel Oyekanmi from Norrenberger noted that pressure on Treasury bill yields could increase if the easing cycle continues.

Nathanael Disu from Afrinvest indicated that the rate cut could enhance demand for equities as investors reassess their allocations.