CBN Cuts MPR by 350 Basis Points to 23%, Biggest Rate Cut Since 2006
The Central Bank of Nigeria has cut its Monetary Policy Rate by 350 basis points to 23 percent, the largest single reduction since 2006, with the CBN citing a structural disconnect between the policy rate and prevailing market rates. The cut is expected to lower borrowing costs for Nigerian businesses and fintechs, redirect investor capital from fixed income into equities, and reprice risk across the country's financial ecosystem.
Nigeria Rates: the CBN just admitted its own number was fiction
For most of 2026, Nigeria's official benchmark rate sat at 26.5%. Banks ignored it. The rate they actually used to price loans and deposits was around 22% — the standing deposit facility rate — because that reflected what money actually cost in the market.
So today's 350-basis-point "reset" isn't really a cut. It's the CBN formally acknowledging that its headline number had become decorative.
For founders trying to borrow, that distinction matters. The official rate moving closer to the real rate means monetary policy might finally transmit — meaning rate decisions could start to actually influence what banks charge. That's a precondition for cheaper credit to show up in practice, not just in press releases.
4 sources
- CBN “resets” MPR by 350 basis points to 23%, biggest cut since 2006 · nairametrics.com · T2
- CBN 350bps MPR cut to drive equities demand as investors rotate from fixed income · nairametrics.com · T2
- CBN says MPR reset due to disconnect with market rates · nairametrics.com · T2
- What CBN’s new 23% interest rate means for loans, savings and Nigerian businesses · technext24.com · T2