The Central Bank of Nigeria (CBN) has reduced the Monetary Policy Rate (MPR) by 50 basis points, lowering it from 27.5% to 27%. CBN Governor, Olayemi Cardoso, announced the decision following the 302nd meeting of the Monetary Policy Committee (MPC) in Abuja.
In addition to the rate cut, the CBN has increased the cash reserve requirement for commercial banks to 45%, while merchant banks will maintain a 16% reserve. A new 75% cash reserve ratio has also been introduced for non-Treasury Single Account (TSA) public sector deposits.
Cardoso explained that the adjustments were made in response to recent moderation in inflation, aiming to stimulate economic activity while maintaining control over liquidity. Economic analysts anticipate that the rate cut could ease borrowing costs for businesses and households, potentially boosting investment and consumption.
