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The Central Bank of Nigeria CBN has reduced its benchmark interest rate to 26.50 percent, marking a significant shift in monetary policy aimed at supporting economic activity.
The decision was announced at the conclusion of the latest Monetary Policy Committee meeting in Abuja. The apex bank said the move reflects moderating inflationary pressures and improving liquidity conditions in the financial system.
Governor Olayemi Cardoso said the committee carefully weighed inflation trends, exchange rate stability, and growth projections before opting for a rate cut.
According to him, while inflation remains a concern, recent data suggest that tightening measures implemented over the past year have started to deliver results. The new rate, down from the previous benchmark, is expected to ease borrowing costs for businesses and households.
Financial analysts say the cut could stimulate lending to critical sectors such as manufacturing, agriculture, and small and medium enterprises. Lower interest rates typically reduce the cost of credit, encouraging investment and expansion.
However, some economists have cautioned that premature easing could reignite inflationary pressures if not carefully managed. The CBN maintained that it would continue to monitor price movements and external vulnerabilities.
The committee also retained other key parameters, including the cash reserve ratio and liquidity ratio, signalling a cautious but supportive stance.
Market reactions were largely positive, with investors interpreting the decision as a signal of confidence in the economy’s stabilisation trajectory.
The rate adjustment comes amid broader fiscal and structural reforms designed to reposition Nigeria’s economy for sustainable growth. Policymakers hope the shift will strike a balance between controlling inflation and stimulating productivity.
The CBN reiterated its commitment to price stability and financial system resilience, noting that future policy decisions will remain data-driven.
