CBN Slashes Interest Rate to 23% in Major Monetary Policy Reset
The Central Bank of Nigeria (CBN) has reduced its benchmark interest rate from 26.5 per cent to 23 per cent, in a major adjustment aimed at strengthening monetary policy transmission and aligning the country’s monetary framework with prevailing economic conditions.
The decision was announced on Tuesday, September 22, 2026, by CBN Governor, Olayemi Cardoso, following the conclusion of the 307th meeting of the Monetary Policy Committee (MPC) in Abuja.
Cardoso said the committee reviewed developments in both the global and domestic economies, emerging risks to the economic outlook and their implications for monetary policy before arriving at the decision.
According to the Governor, the MPC resolved to “reset the monetary policy rate at 23 per cent.”
The latest decision represents a significant reduction from the previous 26.5 per cent MPR, following two consecutive MPC meetings where the benchmark rate was retained. The last rate reduction before Tuesday’s announcement was a 50-basis-point cut in February 2026.
CBN Adjusts Policy Corridor
Alongside the reduction in the MPR, the MPC also recalibrated the standing facility corridor to +50 and -300 basis points around the MPR.
The committee, however, retained the Cash Reserve Requirement (CRR) for deposit money banks at 45 per cent, while the CRR for merchant banks remained at 16 per cent.
The CBN also maintained the 75 per cent CRR on non-Treasury Single Account public sector deposits.
Cardoso explained that the adjustment was designed to strengthen the transmission of monetary policy and restore the MPR to its position as the principal signal of the CBN’s monetary policy direction.
Global Mirror News reports that the CBN’s decision comes as policymakers continue efforts to manage inflation while creating a monetary environment capable of supporting economic activity.
CBN Says Rate Adjustment Does Not Change Policy Stance
The CBN governor stressed that the recalibration of the policy corridor should not be interpreted as a fresh change in the underlying monetary policy stance.
He described it as an operational reset intended to improve the effectiveness of monetary policy implementation and support Nigeria’s transition towards an inflation-targeting framework.
“The MPC emphasized that the recalibration of the corridor does not constitute a change in the current monetary policy stance, but rather an operational reset to enhance the effectiveness of monetary policy and support the transition to an inflation targeting framework,” Cardoso said.
The committee also reviewed ongoing reforms to the CBN’s monetary policy implementation framework, including the use of transaction-based operational benchmarks aimed at improving transparency and efficiency in money market operations.
Cardoso said the committee considered the reset of the MPR and recalibration of the corridor appropriate in order to better align the monetary policy framework with prevailing market realities.
Inflation and Economic Outlook
According to the governor, MPC members considered the prevailing macroeconomic environment sufficiently supportive of the adjustment while maintaining the CBN’s efforts to reduce inflation.
“Members are of the view that the macroeconomic environment remains supportive of such a recalibration without undermining the disinflation process,” Cardoso said.
Global Mirror News gathered that the latest decision will be closely watched by businesses, banks, investors and borrowers because changes in the MPR can influence the broader cost and availability of credit across the economy.
The CBN nevertheless made clear that the adjustment should primarily be viewed as a restructuring of the operational framework rather than an indication that the central bank has abandoned its focus on controlling inflation.
The MPC said the move is expected to improve the transmission of monetary policy and reinforce the MPR as the key benchmark for signalling the direction of monetary policy.
The new 23 per cent MPR therefore becomes the latest major adjustment in the CBN’s ongoing effort to refine its monetary policy framework while balancing inflation control, financial-market stability and broader economic conditions.
