The Central Bank of Nigeria has lowered its benchmark interest rate by 350 basis points, bringing it to 23%. This move marks the most significant reduction in borrowing costs in recent years and signals the end of the previous monetary tightening cycle.
The regulator had previously maintained an aggressive stance, raising the Monetary Policy Rate to 27.5% to address inflation that exceeded 27% in early 2025. Prior to the current decision, the bank implemented smaller cuts of 50 basis points in September 2025 and February 2026.
Inflation in the country declined from 27.61% in January 2025 to approximately 15.1% by January 2026. Governor Olayemi Cardoso attributed the policy shift to disinflationary trends and the stabilization of exchange rates.
Despite the rate cut, the Central Bank of Nigeria kept the Cash Reserve Ratio for deposit money banks at 45%. Additionally, a 75% reserve requirement remains in place for specific public-sector deposits.
Market analysts had anticipated further monetary easing throughout 2026, though most forecasts suggested incremental adjustments of 50 to 100 basis points rather than the 350 basis point reduction that was ultimately implemented.
