WorldStage– The Monetary Policy Committee (MPC) of the CBN on Tuesday reduced Nigeria’s baseline interest rate known as the Monetary Policy Rate (MPR) from 27.50 per cent to 27 per cent.
This development marks a departure from the aggressive tightening monetary policy stance of the MPC since 2024.
The CBN Governor, Yemi Cardoso while presenting a communiqué from the 302nd meeting of the MPC said that the committee also decided to lower the Cash Reserve Ratio (CRR) to 45 per cent from 50 per cent for commercial banks, and retained it at 16 per cent for merchant banks.
He said the MPC also retained the Liquidity Ratio at 30 per cent, and adjusted the Asymmetric Corridor to +250/-250 basis points from +500/-100 basis points around the MPR.
According to the CBN governor, the committee Introduced a 75 per cent CRR on non-TSA public sector deposits to enhanceliquidity management.
He said that the committee’s decision to lower the MPR was predicated on the sustained disinflation recorded in the past five months.
He said that the decision was also informed by projections of declining inflation for the rest of 2025, and the need to support economic recovery efforts.
Meanwhile, the CBN Governor has said that 14 Nigerian banks have fully met the new capital requirement in the ongoing recapitalisation exercise.
CBN introduced a new minimum capital base requirement for banks, with tiers depending on licence type.
Before then, the last major bank recapitalisation exercise in Nigeria was in 2004, when the CBN raised the minimum capital requirement for all banks from two billion Naira to N25 billion.
This was a significant increase that led to a major consolidation in the banking sector, as the number of banks was reduced from 89 to 25 through a series of mergers and acquisitions.
According to Cardoso, members of the MPC acknowledged the significant progress in the ongoing bank recapitalisation exercise, as 14 banks have fully met the new capital requirement.
“They, therefore, urged the CBN to continue the implementation of policies and initiatives that would ensure the successful completion of the ongoing recapitalisation exercise,” he said.
He said that the committee further noted the successful termination of forbearance measures and waivers on single obligors, which has helped to promote transparency, risk management, and long-term financial stability in the banking system.
“The MPC reassured the public that the impact of the removal of forbearance is transitory and does not pose any threat to the soundness and stability of the banking system, price, and other domestic developments.”
In the current recapitalisation exercise, commercial banks with international authorisation now have a new capital requirement of N500 billion.
Commercial banks with national authorisation have N200 billion as capital requirement, and commercial banks with regional authorisation have N50 billion.
Merchant banks have a requirementof N50 billion, non-interest banks (national) N20 billion and non-interest banks (regional), N10 billion.
