csrreporters 
The Central Bank of Nigeria (CBN) has reduced the Monetary Policy Rate (MPR) by 50 basis points to 27 per cent, a move aimed at stimulating economic growth and supporting both small and medium-sized enterprises (SMEs) and households. The decision, announced by Dr. Victor Oboh, Director of the CBN’s Monetary Policy Department, is part of a broader strategy to lower borrowing costs, increase credit flow to key sectors, and enhance overall economic activity.
Dr. Oboh explained that lower borrowing costs for banks are expected to translate into reduced interest rates for households and businesses. This, in turn, can decrease production costs, lower consumer prices, and improve purchasing power factors that directly support growth in businesses and household welfare. “Targeted sectors, especially promising SMEs, will benefit from more affordable financing, enabling expansion, job creation, and greater productivity,” he said.
The CBN emphasized that the rate cut is a careful balancing act. While it seeks to spur growth, the bank remains confident in the stability of the naira, citing robust external reserves, a stable exchange rate, and decelerating inflation. Measures such as adjusting the Cash Reserve Ratio for non-TSA public deposits are also being used to manage liquidity and control inflation risks.
Global trends influenced the decision as well, with other central banks, including those in the US and Ghana, cutting rates to stimulate growth amid international trade uncertainties.
Looking ahead, Dr. Oboh noted that future policy decisions will be data driven, particularly in relation to inflation trends, which are expected to continue easing through the rest of 2025. The CBN expects that the combined effect of these measures will not only make credit more accessible but also strengthen economic growth, empower SMEs, and enhance household living standards.