The Central Bank of Nigeria’s (CBN) Monetary Policy Committee (MPC) has reduced the Monetary Policy Rate (MPR) by 50 basis points to 27.00 percent amid ongoing disinflation at its 302nd meeting held on September 22–23, 2025.
In addition to the rate cut, the Committee adjusted the Standing Facilities corridor to +250/-250 basis points, raised the Cash Reserve Ratio (CRR) for commercial banks to 45 percent, and introduced a 75 percent CRR on non-TSA public sector deposits. The Liquidity Ratio was retained at 30 percent.
According to the MPC, the decision to ease the benchmark rate reflects Nigeria’s consistent disinflation trend over the past five months.
Headline inflation eased to 20.12 percent in August 2025 from 21.88 percent in July, while food inflation moderated to 21.87 percent from 22.74 percent. Core inflation also dropped to 20.33 percent in the same period.
The Committee attributed the slowdown to exchange rate stability, declining PMS prices, improved capital inflows, and rising crude oil output. These factors, combined with surplus current account balances, have anchored inflation expectations and provided scope for monetary easing.
The MPC highlighted the resilience of the Nigerian economy, with GDP growth accelerating to 4.23 percent year-on-year in Q2 2025 from 3.13 percent in Q1.
The oil sector was a key driver, expanding by 20.46 percent compared with 1.87 percent in the previous quarter.
This rebound is expected to further support foreign exchange reserves, which stood at $43.05 billion as of September 11, 2025, providing 8.28 months of import cover.
The Committee said the macroeconomic stability achieved so far creates the right conditions to stimulate growth without jeopardizing price stability.
Despite progress on inflation, the MPC noted excess liquidity pressures in the banking system, largely driven by fiscal releases.
To contain this, the Committee raised the CRR for commercial banks and imposed a 75 percent CRR on non-TSA public sector deposits.
On financial stability, the Committee confirmed that 14 banks have met the new capital requirements under the ongoing recapitalisation exercise.
It also reaffirmed that financial soundness indicators remain within prudential benchmarks, despite the termination of forbearance measures on single obligors.
The MPC projects continued disinflation over the coming months, supported by harvest season supply, exchange rate stability, and declining PMS prices. The next MPC meeting is scheduled for November 24–25, 2025.