September 23, 2026/CSL Update
MPC delivers shock rate cut
Key Takeaways
- In a surprise move, the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) have cut the benchmark policy rate from 26.5% to 23.0%.
- The CBN Governor made it clear that the decision was an operational realignment aimed at strengthening monetary policy transmission rather than a change in the policy stance.
- Despite the substantial rate cut, we do not expect a similar magnitude of move on short term interest rates.
The MPC surprised the market yesterday at the conclusion of its two-day meeting, reducing its policy rate by 350 basis points (bps) to 23.0% while further tightening liquidity conditions by narrowing the asymmetric corridor around the policy rate to +50/-300bps from +50/-450bps.
According to Bloomberg, 5 out of 8 economists polled ahead of the meeting had predicted no change in the policy rate, a view we also held. The Committee also opted to retain the Cash Reserve Ratio (CRR) for Deposit Money Banks at 45.0%, Merchant Banks at 16.0%, and non-TSA public sector deposits at 75.0%, while keeping the Liquidity Ratio unchanged at 30.0%.
We highlight that the adjustment of the asymmetric corridor brings the Standing Lending Facility (SLF) rate to 23.5% from 27.0% and the Standing Deposit Facility (SDF) rate to 20.0% from 22.0%,
Click link to read more: CSL Economics and Strategy – September 2026 MPC Decision