Economists have advised the Central Bank of Nigeria (CBN) to reduce interest rates more sharply to help businesses grow and boost the economy.
Their comments came after the CBN lowered its main lending rate (Monetary Policy Rate) slightly, from 27.5% to 27%. This is the first cut in five years.
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CBN Governor, Olayemi Cardoso, explained that the decision was based on recent drops in inflation, which stood at 20.33% in August 2025. He said the cut would support economic recovery while keeping prices stable.
Experts, however, believe the cut was too small.
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Prof. Uche Uwaleke said the 0.5% reduction was like “a slap on the wrist,” but welcomed other moves such as reducing banks’ cash reserve ratio from 50% to 45%.
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Dr. Rislanudeen Muhammad described the move as “the tip of the iceberg,” saying the economy needs stronger action, especially to support industries struggling to get affordable loans.
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Dr. Hassan Mahmud added that the cut may not immediately lower borrowing costs for businesses, as other factors also determine bank lending rates.
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Aliyu Ahmed, a former finance official, urged government to manage rising revenue carefully, rebuild financial reserves, and work closely with the CBN to keep inflation under control.
The new policies also include:
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Keeping the liquidity ratio at 30%.
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Imposing a 75% cash reserve requirement on some public sector deposits to reduce excess money in circulation.
Cardoso said the bank’s reforms have improved exchange rate stability and foreign reserves, and promised to make it easier for Nigerians to access foreign exchange.
Analysts believe that if the new measures work well, they could make loans cheaper, encourage investments, create jobs, and help the economy grow.