CBN Cuts Interest Rate, Introduces 75% CRR on Public Deposit
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) cuts the benchmark interest rate by 50 basis points (bps), citing disinflation and the naira’s stability.
At the end of its 302nd meeting held on September 22 and 23, 2025, the committee voted unanimously to ease monetary policy in a bid to balance price stability with growth.
Latest data released by the National Bureau of Statistics revealed that Nigeria’s real gross domestic product surged by 4.23% in the second quarter of the year. Inflation is on the decline, and the naira has become less volatile.
Given the global central bankers’ latest round of monetary easing, all 12 members of the CBN committee agreed to cut the Monetary Policy Rate (MPR) by 50 bps to 27.00% from 27.50%, suggesting the authority’s satisfaction with decelerating headline inflation.
The decision to cut rates suggests a deliberate move to expansionary policy to be driven by increased private sector activities. Lower borrowing costs would fuel business expansion and economic growth, analysts said.
The committee also adjusted the asymmetric corridor around the MPR to +250 bps/-250 bps while reducing the Cash Reserve Ratio (CRR) for Deposit Money Banks by 500bps to 45%.
In a notable policy shift, the MPC introduced a 75% CRR for non-Treasury Single Account public sector deposits to tighten liquidity control. Meanwhile, the CRR for merchant banks was left unchanged at 16%, and the liquidity ratio was maintained at 30%.
The decision to cut rates was anchored on the sustained moderation in headline inflation, which eased to 20.12% in August 2025, alongside the need to support economic growth momentum.
The decision was also supported by the stability of the Nigerian naira in the foreign exchange market, plus improvement in other related macro indicators – including GDP growth.
Adjusting the interbank asymmetric corridor was aimed at strengthening monetary policy transmission, with the committee expressing confidence in the current macroeconomic environment, underpinned by a stable exchange rate, robust external reserves, and a broadly flexible policy framework. OMO Bills Inflow Fuels Banking System Liquidity, Rates Steady
