September 23, 2026/Coronation Update
Summary
The Committee delivered a 350bps reduction in the Monetary Policy Rate to 23.00, the largest MPR reduction, since 2006 and lowest MPR since Feb 2024, and recalibrated the asymmetric corridor to +50/-300bps from +50/-450bps, while retaining CRR at 45.00% (DMBs), 16.00% (merchant banks) and 75.00% (non-TSA public sector deposits), and the Liquidity Ratio at 30.00%.
The Committee emphasized that the adjustment was designed to restore the primacy of the MPR, improve monetary policy transmission, and better align the policy framework with prevailing money market realities.
While the magnitude of the rate reduction appears dovish, coming against our expectation that the MPC would maintain the policy rate at 26.50% and broadly exceeding market expectations but signals a move towards a less restrictive policy stance rather than a shift to an accommodative monetary stance. Importantly, the real policy rate remains firmly positive at 7.61%, underscoring the continued anti-inflationary orientation of monetary policy.
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