The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has reduced the Monetary Policy Rate (MPR) by 50 basis points, lowering it from 27.5 per cent in July to 27 per cent.

The decision was reached during the Committee’s 302nd meeting, held on 22 and 23 September 2025. The asymmetric corridor around the MPR was retained at +260 and -250 basis points, reflecting the Bank’s cautious stance on market volatility.

CBN Governor, Dr. Olayemi Cardoso, who briefed journalists after the meeting, said the adjustment was informed by sustained disinflation over the past five months, projections of a further decline in inflation through the rest of 2025, and the need to support economic growth.

The Committee also reduced the cash reserve requirement for commercial banks to 45 per cent while retaining that of merchant banks at 16 per cent. In addition, it introduced a 75 per cent cash reserve requirement on non-TSA public sector deposits to strengthen liquidity management.

To enhance the effectiveness of monetary policy transmission, the MPC adjusted the standing facilities corridor, while the liquidity ratio was maintained at 30 per cent.

Expressing satisfaction with the prevailing macroeconomic stability, the Committee highlighted positive indicators such as sustained disinflation, improved output growth, a stable exchange rate and robust external reserves. It particularly welcomed August’s disinflation, which was the strongest in five months, driven by tighter monetary policy, exchange rate stability and increased capital inflows.

Additional factors cited included a continued moderation in the price of petrol and a rise in crude oil production, both of which helped to anchor inflation expectations.

However, the MPC cautioned about excess liquidity in the banking system, largely fuelled by increased fiscal spending, and stressed the need for tighter oversight of interbank market operations.

“The stability in the macroeconomic environment has provided some room for monetary policy to further support growth and recovery,” the Committee noted.

Meanwhile, the National Bureau of Statistics (NBS) reported that Nigeria’s Gross Domestic Product (GDP) grew by 4.23 per cent year-on-year in the second quarter of 2025. This marks a notable improvement from the 3.48 per cent recorded in the same quarter of 2024, reflecting the economy’s resilience.

The agriculture sector expanded by 2.82 per cent, up from 2.60 per cent in Q2 2024. Industry grew strongly by 7.45 per cent compared with 3.72 per cent a year earlier, while services recorded 3.94 per cent growth, slightly above the 3.83 per cent of Q2 2024.

The industry’s share of GDP rose to 17.31 per cent, from 16.79 per cent a year earlier. In nominal terms, aggregate GDP stood at ₦100.73 trillion in Q2 2025, compared with ₦84.48 trillion in Q2 2024, representing a nominal year-on-year increase of 19.23 per cent.