(DDM) – The Central Bank of Nigeria (CBN) has cut its benchmark interest rate to 27 percent, a move aimed at easing borrowing costs for businesses and households after months of aggressive monetary tightening.
Diaspora Digital Media (DDM) gathered that the decision followed the outcome of the Monetary Policy Committee (MPC) meeting held in Abuja on Tuesday, where Governor Olayemi Cardoso announced the shift in policy direction.
The cut comes after Nigeria recorded a steady decline in inflation for five consecutive months.
The inflation rate eased to 20 percent in August, offering policymakers confidence to stimulate credit access and growth.
Cardoso explained that the naira has also gained ground, appreciating by 2.8 percent against the United States dollar since July, a factor that strengthened the CBN’s resolve to adjust monetary conditions.
The governor stressed that the decision signals cautious optimism that Nigeria’s economy is stabilizing after two years of painful adjustments marked by currency volatility, rising living costs, and tightened lending rates.
For three consecutive MPC meetings, the CBN had maintained the rate at 27.5 percent, following a series of sharp hikes that began in 2022 to curb runaway inflation and stabilize the naira.
By lowering the policy rate now, the CBN joins other African economies that have recently shifted to growth-focused strategies.
Nigeria is the last among the continent’s four largest economies to ease borrowing costs, trailing South Africa, Egypt, and Algeria.
Analysts told DDM that the decision could help businesses struggling with high credit costs, particularly in manufacturing and agriculture, where access to affordable loans is critical to boosting production and employment.
However, concerns remain that inflationary pressures could resurface if global oil prices rise sharply or if insecurity continues to disrupt food supply chains across Nigeria.
Financial experts also noted that while the naira’s recent appreciation offers some relief, Nigeria’s foreign exchange market remains fragile and sensitive to capital inflows, oil earnings, and external shocks.
The CBN reassured Nigerians that it will continue to monitor inflation trends and currency stability closely, adjusting monetary tools when necessary to maintain economic balance.
For ordinary citizens, the rate cut could gradually translate into reduced lending rates on loans, mortgages, and credit facilities, although banks are often slow to adjust to new policy signals.
Economists argue that for the impact to be fully felt, fiscal reforms must complement monetary easing through improved infrastructure, power supply, and security to lower the cost of doing business.
The CBN concluded that its priority remains to sustain price stability while creating conditions for inclusive growth in Nigeria’s economy.
The post CBN slashes interest rate to 27% after inflation slowdown
DDM News
first appeared on Diaspora Digital Media DDM.
