The Central Bank of Nigeria, CBN, has reduced its benchmark interest rate from 26.5 per cent to 23 per cent.
The move signals an easing of monetary policy after several months of maintaining a tight stance to curb inflation.
The CBN Governor, Olayemi Cardoso, announced the decision in Abuja on Tuesday. Cardoso made the announcement at the end of the Monetary Policy Committee’s 307th meeting.
The two-day meeting was held at the CBN headquarters in Abuja. It was attended by members of the MPC who deliberated on recent economic developments.
The committee reviewed key indicators including inflation, exchange rate stability and economic growth.Cardoso said the committee observed a divergence between the Monetary Policy Rate and prevailing market rates.
He said this was among the considerations that informed the decision to cut the rate.According to him, the committee also considered global and domestic economic conditions.
The governor noted that inflationary pressures have shown signs of moderating in recent months.He said the committee was confident that the current policy direction would sustain the downward trend.
The latest move, if confirmed in the MPC’s official communiqué, would mark a significant shift in policy direction. It shows the apex bank is balancing inflation control with the need to support economic activity.
Analysts say the cut is expected to improve access to credit for businesses and households. The high interest rate regime had made borrowing expensive for many sectors of the economy.
The CBN had maintained a tight monetary policy for months in a bid to tame rising inflation. The inflation rate had remained elevated due to food prices, energy costs and exchange rate pressures.
The reduction to 23 per cent is seen as a cautious step towards monetary easing.
Economic experts say lower interest rates could stimulate investment and economic growth. They however cautioned that the CBN must continue to monitor inflation to avoid a rebound.
The business community has welcomed the development, describing it as a positive signal. Manufacturers and small business owners have long called for lower interest rates to reduce cost of production.
The CBN governor assured that the bank would continue to use its tools to maintain price stability.He said the MPC would remain data-driven and responsive to economic realities.
The official communiqué of the meeting is expected to provide more details on the committee’s decisions and projections.
The meeting ended with a call for fiscal and monetary authorities to continue to collaborate to sustain economic recovery.
