The Federal Government has applauded the decision by the Central Bank of Nigeria to reduce the Monetary Policy Rate to 26.5 per cent, describing the move as a strong indication of economic recovery and improved macroeconomic coordination.
The adjustment was announced after the apex bank’s Monetary Policy Committee meeting held in Abuja.
Signal Of Economic Stabilisation
Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said the rate cut reflects increasing confidence in Nigeria’s economic stabilisation efforts.
According to him, the decision demonstrates close alignment between fiscal and monetary authorities as the country transitions from a stabilisation phase to broader economic consolidation.
Edun noted that easing the benchmark interest rate would create additional fiscal room for the government to intensify spending on infrastructure, energy development, agriculture and critical social services.
Impact On Businesses And Credit
The minister explained that the reduction in the policy rate is expected to improve credit conditions for businesses and households.
He stated that lower borrowing costs would stimulate private sector investment, enhance productivity, and support job creation across key sectors of the economy.
The government believes the move will also reinforce investor confidence, signalling that ongoing reforms under President Bola Ahmed Tinubu are yielding measurable results.
MPC Decision
The Monetary Policy Committee, chaired by CBN Governor Olayemi Cardoso, resolved to reduce the MPR by 50 basis points to 26.5 per cent.
The committee retained the asymmetric corridor around the MPR at plus 50 and minus 450 basis points. It also maintained the Cash Reserve Requirement for Deposit Money Banks, Merchant Banks and non-TSA public sector deposits at existing levels.
Cardoso explained that the decision followed a balanced assessment of inflationary risks and broader macroeconomic trends.
He highlighted ongoing disinflation, exchange rate stability and improved food supply conditions as key factors influencing the policy shift.
Second Consecutive Cut
This marks the second interest rate reduction under the current CBN leadership, following a similar downward adjustment in 2025.
Economic analysts interpret the move as a cautious but deliberate pivot toward growth support, while maintaining vigilance against inflationary pressures.
Outlook
The Federal Government reiterated its commitment to disciplined fiscal management, structural reforms and continued collaboration with the Central Bank to drive sustainable growth.
Officials maintain that coordinated economic policy will strengthen macroeconomic stability, enhance credit accessibility, and improve living standards for Nigerians in the medium to long term.
The CBN 26.5% interest rate cut is therefore seen as both a policy recalibration and a confidence signal aimed at deepening Nigeria’s economic recovery trajectory.
