The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) reduced the Monetary Policy Rate (MPR) by 50bps to 27.0% from 27.5%, signaling the first shift towards monetary policy easing since 2020.

This decision was driven by the sustained disinflationary trend and continued naira stability. In addition, the committee revised the asymmetric corridor around the MPR to +250bps/-250bps from +500bps/-100bps and lowered the Cash Reserve Ratio (CRR) for deposit money banks to 45.0% from 50.0%.

To strengthen liquidity management, the MPC introduced a 75.0% CRR on non-Treasury Single Account (TSA) public sector deposits.

On the other hand, the CRR for merchant banks and the liquidity ratio were maintained at 16.0% and 30.0%, respectively.

On domestic growth, the Committee acknowledged the robust growth recorded in Q2-25 +4.23% vs. Q1-25: +3.13%, reflecting higher growth across the oil and non-oil sectors.

On inflation, the MPC also noted the sustained decline in headline inflation, which eased by 176bps to 20.12% in August, supported by tight monetary policy, the relative stability of the naira and steady PMS prices, all of which have helped anchor inflation expectations.

On the external sector, the MPC highlighted the notable improvement in external reserves, which rose to USD43.05 billion as of September 11 from USD40.51 billion in July 2025, providing approximately 8.3 months of import cover.

The Committee also noted that the current account surplus widened to USD5.28 billion in Q2-25, compared to USD2.85 billion in Q1-25.

On global developments, the committee noted the IMF’s upward revision of global GDP growth for 2025 to 3.0% from 2.8%, driven largely by reduced trade frictions following successful negotiations with the US and further easing in global monetary policy. However, lingering geopolitical tensions and persistent trade uncertainties remain key downside risks.