MPC Resets Interest Rate To 23% From 26.5%, Observes Macroeconomic Stability As External Reserves Hit $55.25 Billion

By Clement Nwoji, Abuja

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has reset the Monetary Policy Rate (MPR) from previous rate of 26.5 per cent to 23 per cent.

Further, the Committee recalibrated the Standing Facilities Corridor to +50/-300 basis points around the MPR, leading to the retaining the Cash Reserve Requirement (CRR) for Deposit Money Banks at 45.00 per cent, Merchant Banks at 16.00 per cent, and non-TSA public sector deposits at 75.00 per cent.

MPR is the determinant of interest rates chargeable by financial institutions.

The CBN Governor, Olayemi Cardoso, disclosed these decisions as the highpoints of MPC 307th meeting concluded Tuesday in Abuja.

Prior to the decisions, he explained that 11 members of the Committee in attendance examined recent trends in the global and domestic economic environment, considered emerging risks to the outlook, and evaluated their potential implications for monetary policy.

According to him, “The Committee decided to reset the MPR and recalibrate the policy corridor as an important operational realignment aimed at strengthening monetary policy transmission and reinforcing the primacy of the monetary policy rate.

“The MPC emphasized that the recalibration of the corridor does not constitute a change in the current monetary policy stance, but rather an operational reset to enhance the effectiveness of monetary policy and support the transition to an inflation targeting framework.”

Cardoso further disclosed the growth in Gross external reserves at US$55.25 billion on September 18, 2026, the highest in the last 18 years and sufficient to finance approximately 11.3 months of imports of goods and services.

He noted that the committee examined recent trends in the global and domestic economic environment, considered emerging risks to the outlook and evaluated their potential for monetary policy. The Committee decided as follows: reset the monetary policy rate at 23 per cent,” Cardoso said.

He said the MPC broadly observed the increasing resilience demonstrated by the Nigerian economy as reflected in the moderating inflation, robust external reserve buffers, improved external sector fundamentals and strengthening investor confidence.

The CBN cited the considerable improvement in the balance of payment surplus of US$3.51 billion in Q2 2026 compared with US$2.38 billion in Q1 2026, adding that the current account surplus increased by 67.92 per cent to US$7.54 billion in 2026, from US$4.49 billion in Q1 2026.

The latest reduction comes after the MPC had retained the rate unchanged at its previous meetings, following a 50-basis-point cut in February 2026.

“The MPC emphasized that the duration of the corridor does not constitute a change in the current monetary policy stance, but rather an operational reset to enhance the effectiveness of monetary policy and support the transition to an inflation targeting framework.

“Members are of the view that the macroeconomic environment remains supportive of such a recalibration without undermining the disinflation process,” he said.