In a stunning move that jolted the markets, the Central Bank of Nigeria has slashed the nation’s benchmark interest rate, cutting the Monetary Policy Rate by a massive 350 basis points from 26.50% to 23.00%.
It is the biggest policy reset in years — a bold bet that Nigeria’s economy has finally stabilized enough to breathe.
Cardoso Declares: “We Can Now Plan, We Can Project”
At the end of its 307th meeting in Abuja yesterday, the 11-member Monetary Policy Committee led by Governor Olayemi Cardoso voted to cut the MPR, adjust the corridor to +50 and -300 basis points, and hold all other parameters — CRR at 45% for commercial banks, 16% for merchant banks, 75% for public sector deposits, and liquidity ratio at 30%.
Cardoso said the fundamentals have dramatically changed.
“From a situation of great volatility to one where the market is stable. We can plan. We can project,” he declared.
He insisted the cut is not a U-turn on tight policy, but a surgical fix to make the MPR work again. The gap between the MPR and interbank rates, he said, had become too wide.
“Our MPR and the interbank rates, there’s a gap. There’s a need to close that gap,” Cardoso said, calling it “an operational realignment to support Nigeria’s transition towards inflation-targeting.”
N298bn Boom On NGX As Experts Hail Turning Point
The market erupted instantly. The Nigerian Exchange rallied N298 billion as investors bet on cheaper loans and fatter corporate profits. The All-Share Index climbed to 250,614.66 points, with market cap hitting N162.683 trillion.
Analysts hailed it as a decisive pivot.
“This is a significant and positive turning point,” said Dr. Muda Yusuf of CPPE, noting it will ease financing pressure for manufacturers and farmers.
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The numbers justify the gamble. Headline inflation has eased to 15.39% in August, GDP grew 4.43% in Q2, and foreign reserves hit an 18-year high of $55.25 billion, enough for 11.3 months of imports.
“We Will Not Be Caught Unawares”
Despite the cut, Cardoso warned the war is not over. The bank will remain restrictive and mop up excess liquidity ahead of election spending.
He recalled inheriting N23.7 trillion in Ways and Means and over N10 trillion in interventions, which fuelled inflation, and said unification of the forex market and bank recapitalisation have restored stability.
“This is a reset and a recalibration. That is all it is,” he said, vowing: “We will be proactive. We will not allow ourselves to be caught unawares.”
