Nigeria's central bank cuts its benchmark rate to 23%

The Central Bank of Nigeria (CBN) has cut its benchmark interest rate by 350 basis points, from 26.5% to 23%, after the 307th meeting of its Monetary Policy Committee (MPC) in Abuja on 21–22 September 2026.

Governor Olayemi Cardoso announced the decision on 22 September. He described it as a "reset" and an operational realignment to make monetary policy work better, rather than a change in the bank's overall stance.

What changed

• Monetary Policy Rate: cut to 23% from 26.5%.
• Standing facilities corridor: recalibrated to +50/−300 basis points around the policy rate.
• Cash reserve requirement: held at 45% for commercial banks, 16% for merchant banks and 75% for non-TSA public sector deposits.

Why now

Cardoso said the policy rate had drifted away from the rates actually prevailing in the market, weakening how policy decisions pass through to the economy. With conditions more stable, he argued there was "no better time" to make the adjustment.

The move follows easing inflation. Nigeria's headline inflation rate slowed to 15.39% in August 2026 from 15.43% in July, according to the National Bureau of Statistics.

The bank also pointed to stronger external buffers. Vanguard reported that the country's external reserves stood at $55.25 billion as of 18 September, their highest level in 18 years.

What it means

A lower policy rate would normally put downward pressure on borrowing costs for businesses and households, although the CBN has stressed that this cut is about improving transmission rather than a loosening cycle.

Investors reacted positively. The Nigerian Exchange hit a record market capitalisation the next day, as the Dangote refinery's public offer continued to draw attention to Nigerian equities.