The Central Bank of Nigeria (CBN) has announced a minor adjustment to the Monetary Policy Rate (MPR), lowering it from 27.5% to 27.25%, in a move aimed at boosting private-sector lending and stabilizing the naira. The decision follows recent signs of economic recovery amid easing inflation pressures and renewed investor confidence.
In a statement released after its October Monetary Policy Committee (MPC) meeting, the CBN said the rate cut was necessary to encourage credit flow to productive sectors and ease borrowing costs for businesses. The Bank also maintained the Cash Reserve Ratio (CRR) and Liquidity Ratio, signaling a cautious approach to balancing growth with inflation control.
Analysts say the decision reflects the CBN’s growing confidence that inflation—though still elevated—is gradually moderating due to improved agricultural output and stable fuel prices. By slightly lowering the benchmark rate, the Bank hopes to stimulate investment, enhance employment opportunities, and sustain the momentum of GDP growth recorded in the third quarter of 2025.
Financial experts, however, warn that the full benefits may take time to materialize unless other structural challenges, such as high energy costs and limited foreign exchange access, are addressed.
The rate adjustment is expected to provide some breathing space for manufacturers, SMEs, and other private businesses struggling with high operational expenses. With inflation slowing and market confidence improving, the move could help ease credit constraints and encourage expansion in key non-oil sectors.
However, economists caution that maintaining currency stability remains critical. If demand for foreign exchange continues to rise faster than supply, gains from the rate adjustment could be eroded.
“The CBN’s decision reflects a fine balance between encouraging growth and keeping inflation in check,” said Lagos-based economist, Dr. Funmi Adeyemi. “The next few months will show whether banks translate this into affordable credit for real-sector players.”
As Nigeria navigates a fragile global economic environment, the CBN’s proactive policy adjustments will play a decisive role in shaping growth prospects heading into 2026. Businesses and investors are watching closely for further signs of policy consistency and exchange rate stability.
Source: GNA TV Business Desk | CBN Press Release
