The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has cut the benchmark interest rate to 23 per cent from 26.5 per cent.
The decision was taken at the 307th meeting of the MPC, held on Tuesday, September 22, 2026, according to figures released by the apex bank.
Under the new policy parameters, the MPR, which serves as the benchmark interest rate for the economy, has been set at 23 per cent.
The MPC also recalibrated the Standing Facilities Corridor to +50 and -300 basis points around the MPR. This means the applicable rates for the Central Bank’s standing lending and deposit facilities will operate within the new corridor.
The committee retained the Cash Reserve Requirement (CRR) for Deposit Money Banks at 45 per cent, while Merchant Banks will continue to maintain a CRR of 16 per cent.
The CBN also retained a significantly higher 75 per cent CRR on non-Treasury Single Account (TSA) public-sector deposits.
The latest decision keeps the amount of deposits that banks are required to hold as reserves with the CBN unchanged, leaving a substantial portion of bank funds unavailable for conventional lending.
The CRR is one of the major tools available to the CBN for managing liquidity in the banking system. The CBN explains that a higher reserve requirement generally leaves banks with less money available to create credit, while a lower requirement can increase the funds available for lending.
The MPR, meanwhile, influences the broader cost of borrowing in the economy. Changes in the policy rate can affect lending rates, savings returns, investment decisions and consumer spending through the monetary-policy transmission mechanism.
The CBN identifies the interest-rate and credit channels among the mechanisms through which monetary policy affects the economy.
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