CBN CUTS RATE TO 23% TO BOOST PRODUCTIVE ACTIVITIES

The Central Bank of Nigeria has reduced the Monetary Policy Rate (MPR) from 26.5 per cent to 23 per cent, saying the decision is aimed at stimulating productive activities and supporting the continued moderation of inflation.
CBN Governor Olayemi Cardoso explained that the 350-basis-point reduction was part of a recalibration of monetary policy rather than a complete shift to an easing stance.
The apex bank said the adjustment was intended to improve the transmission of monetary policy to the wider economy and encourage greater access to credit for productive sectors.
The rate cut is expected to create room for lower borrowing costs for businesses, particularly manufacturers and other operators that rely heavily on bank financing.
However, economic experts have stressed that the impact of the decision will depend largely on whether commercial banks transmit the lower policy rate to businesses and households through reduced lending rates.
The CBN said it would continue to monitor inflation, liquidity, foreign exchange demand and other economic indicators while maintaining measures necessary to preserve financial and economic stability.
The decision comes after a period of tight monetary policy during which the CBN raised interest rates to contain inflation and support stability in the foreign exchange market.
The latest reduction signals a new phase in the central bank’s approach as it seeks to balance price stability with the need to support economic growth and productive investment.