CBN Governor, Olayemi Cardoso
…Economy truly recovering—Prof Uwaleke
For the very first time in five years, the Central Bank of Nigeria (CBN) on Tuesday cut down its benchmark Monetary Policy Rate (MPR) by 50 basis points from 27.5 per cent to 27 per cent, a sign experts see as indication to salutary economy after the bruises caused by Covid 19, Subsidy removal and speaking to AriseTV in an interview, Professor of Capital Market and President, Association of Capital Market Academics (ACMA), Prof. Uche Uwaleke said “The decision, announced after the Monetary Policy Committee (MPC) meeting in Abuja, reflects the bank’s confidence in Nigeria’s recent disinflation trend and a brighter economic outlook. Inflation, which has remained a major concern, eased to 20.12 per cent in August, raising hopes of continued moderation through the rest of 2025.
Business Hilights recalls that alongside the rate cut, the apex bank introduced several adjustments to its monetary tools. The Cash Reserve Ratio (CRR) for commercial banks was lowered to 45 per cent from 50 per cent, while that of merchant banks was retained at 16 per cent. However, non-Treasury Single Account (TSA) public sector deposits will now attract a higher CRR of 75 per cent. The Liquidity Ratio was left unchanged at 30 per cent, while the corridor around the MPR was widened to ±250 basis points.
Governor of Apex Bank, Olayemi Cardoso explained that the decision was aimed at balancing the need to stimulate growth with the imperative of sustaining price stability. “The moderation in inflation and improved growth outlook have created some room for cautious easing of monetary conditions, without jeopardising macroeconomic stability,” he said.
Continuing, Prof Uwaleke averred that the cut has all it takes to ease borrowing costs for businesses and consumers, spur credit expansion, and support economic growth. However, with rates still relatively high, the immediate impact on lending may be modest. Some experts also warn that external shocks, such as global oil price volatility or naira depreciation, could quickly erode the gains if not carefully managed.
Nigeria’s economy expanded by 4.23 per cent in the second quarter of 2025, up from 3.3 per cent in the first quarter, underscoring stronger momentum in non-oil sectors. The MPC expressed optimism that sustained reforms, coupled with improved liquidity in the banking sector, would further support growth in the coming months.
This move signals a cautious but significant shift in CBN’s monetary stance, after years of aggressive tightening to curb inflation and struggles to put the naira in manageable value stream after all.
