The Central Bank of Nigeria (CBN) on Tuesday reduced the Monetary Policy Rate (MPR), the country’s benchmark interest rate, to 26.5 per cent from 27 per cent.

 

The decision was announced at the end of a two-day meeting of the Monetary Policy Committee (MPC) held in Abuja.

 

Addressing journalists after the meeting, the CBN Governor, Olayemi Cardoso, said the rate cut was driven by recent moderation in headline inflation and other encouraging macroeconomic indicators.

 

According to Cardoso, the Committee carefully reviewed domestic and global economic developments before reaching the decision, noting that inflationary pressures have begun to ease after months of aggressive monetary tightening.

 

“The Committee observed a gradual deceleration in headline inflation and improvements in key macroeconomic fundamentals, which provided room for a measured adjustment of the policy rate,” he said.

 

The reduction marks a shift in the apex bank’s recent stance, which had focused on tightening monetary conditions to curb inflation, stabilise the naira, and restore investor confidence.

 

Economic analysts say the marginal cut signals cautious optimism by the apex bank, as authorities attempt to balance price stability with the need to stimulate growth and ease borrowing costs for businesses and households.

 

Market participants are expected to closely monitor subsequent data releases to assess whether the easing cycle will continue in the coming months.

 

Further details of the MPC’s resolutions, including decisions on the Cash Reserve Ratio (CRR), Liquidity Ratio, and asymmetric corridor, are expected to be outlined in the official communiqué.