OPS Welcomes CBN’s Interest Rate Cut as Positive Signal

The Monetary Policy Committee of the Central Bank of Nigeria has reduced the benchmark interest rate to 26.5 per cent, a move business leaders say, while modest, sends a positive signal for economic growth.

Governor Olayemi Cardoso announced the decision following the committee’s meeting in Abuja, noting that the rate was lowered by 50 basis points from 27 per cent.

The MPC retained other policy parameters, including the cash reserve ratios for banks and the standing facilities corridor, indicating that liquidity conditions remain tight despite the rate adjustment.

Cardoso said the decision followed a balanced assessment of economic risks and improving macroeconomic indicators. He noted that inflation has continued to moderate, with headline inflation easing slightly and food and core inflation also declining.

Month-on-month inflation figures also showed a drop, suggesting that price pressures may be softening.

The committee welcomed recent fiscal measures, including a presidential order directing oil and gas revenues into the Federation Account, noting that the move could strengthen fiscal buffers and reserves.

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Private-sector leaders described the rate cut as cautious but encouraging.

Director-General of the Nigeria Employers’ Consultative Association, Adewale Oyerinde, said the reduction signals that policymakers are beginning to respond to the pressures facing businesses, though the effect on lending rates may take time.

He noted that liquidity constraints remain due to high reserve requirements, which may limit banks’ ability to expand credit to the real sector in the short term.

National Association of Small-Scale Industrialists Vice President Segun Kuti-George said the decision reflects an effort to preserve recent gains in inflation control while maintaining stability.

Dr Muda Yusuf of the Centre for the Promotion of Private Enterprise described the policy stance as growth-supportive but warned that structural constraints could limit its transmission to the broader economy.

The Lagos Chamber of Commerce and Industry also welcomed the move, calling it a cautious shift from aggressive tightening toward stabilisation. However, it emphasised that businesses still need tangible reductions in borrowing costs to support expansion, job creation, and investment.

The chamber urged continued reforms in power supply, transport logistics, agriculture, and regulatory efficiency, noting that sustained improvements in these areas are necessary for monetary easing to translate into real economic growth.