Recent adjustments by the Central Bank of Nigeria have driven down lending rates and inflation, supported by significant external reserves growth and financial reforms, amid a stabilising economy, according to CBN officials and economic experts.
Central Bank of Nigeria’s (CBN) recent monetary policy adjustments have played a significant role in reducing lending rates amid a period of disinflation and economic reforms, according to the bank’s Deputy Governor, Operations, Ms. Emem Usoro. Speaking at the CBN annual seminar for finance correspondents and business editors in Lagos, Usoro highlighted that inflation had fallen to 16.05% in October 2025, while the naira exchange rate stabilised below N1,500 to the US dollar with minimal volatility. She also noted that Nigeria’s external reserves had surpassed $46 billion, offering over 10 months of import cover, a major achievement attributed to reform efforts led by CBN Governor Olayemi Cardoso since his appointment in September 2023.
The deputy governor described the early days of Cardoso’s tenure as challenging, marked by high inflation, forex scarcity, low oil receipts, and dependence on “Ways and Means” financing, all of which stressed the financial system. The subsequent implementation of orthodox monetary policies, strengthened corporate governance, and ongoing bank recapitalisation initiatives, aligned with the Federal Government’s reform agenda, have underpinned recent macroeconomic progress. Usoro stressed the importance of effective communication by the media to bolster public understanding and support for the reforms. She further underscored the need for closer coordination between fiscal and monetary authorities to enhance regulatory frameworks and sustain financial system resilience, especially with the rise of technological innovation and digital finance.
Echoing these themes, development economist Professor Ken Ife, Lead Consultant to the ECOWAS Commission, urged the CBN to intensify enforcement of the Loan-to-Deposit Ratio (LDR) policy as a means to boost private sector credit and stimulate economic growth. He emphasised that channeling more funds into productive sectors is vital for sustaining the ongoing macroeconomic recovery. Ife also highlighted the importance of maintaining price stability as the central bank’s core mandate, noting that sustained disinflation is the most impactful support the apex bank can provide to the financial system. He praised the improvements in foreign exchange inflows facilitated by the rerouting of Nigerian National Petroleum Company (NNPC) revenues through the CBN, increased crude oil production, and growth in refined product exports. Additionally, the introduction of a new foreign exchange code had enhanced transparency, attracting portfolio investments, diaspora remittances, and export proceeds.
These observations align with recent developments in Nigerian monetary policy. In September 2025, the CBN reduced its key lending rate by 50 basis points to 27%, marking the first rate cut since 2020 amid a steady decline in inflation, which stood at 20.12% year-on-year in August. This move aimed to stimulate growth after a period of rate hikes in 2024 driven by President Bola Tinubu’s economic reforms, including naira devaluation and subsidy cuts, that initially caused inflation spikes. Although economists had anticipated a larger cut, the decision reflected cautious optimism about the inflation trajectory.
Alongside interest rate cuts, Nigeria’s overnight lending rate fell by 100 basis points to 25.5%, driven by increased liquidity in the banking system, which surged by approximately 3 trillion naira ($2.02 billion). The CBN also narrowed its interest rate corridor, reducing the standing lending facility and deposit facility rates to encourage further monetary easing and market activity. This dovish shift aims to ease monetary conditions in a manner consistent with the gradual disinflation observed over the past five months.
Nigeria’s macroeconomic improvements are further reflected in the country’s rising foreign exchange reserves, which surpassed $40 billion by the end of 2024, a three-year high, supported by non-oil forex inflows and reduced short-term liabilities. Despite some seasonal fluctuations in early 2025, the CBN expects a steady uptick in reserves, bolstered by increased oil and non-oil exports. This enhanced external position contributed to a $6.83 billion balance of payments surplus in 2024, a substantial turnaround from previous deficits, driven by increased investor confidence, remittances, and export revenues. Portfolio investments more than doubled, though foreign direct investment declined.
The economic momentum gained recognition from Moody’s, which upgraded Nigeria’s credit rating from “Caa1” to “B3,” citing improved external and fiscal positions alongside stronger macroeconomic fundamentals. This followed Nigeria’s fastest economic growth in a decade in 2024, with a 4.6% expansion in the fourth quarter, spurred by fiscal reforms including subsidy removals and exchange rate adjustments. The World Bank also highlighted the country’s growth and called for continued tight monetary and fiscal discipline to tackle persistent inflationary pressures.
Despite these positive signals, the CBN’s Deputy Governor Usoro acknowledges that more work remains to enhance macroeconomic fundamentals and living standards. The alignment of fiscal and monetary policies and effective regulatory oversight remain critical to sustaining Nigeria’s economic recovery, especially as digital finance evolves rapidly.
In summary, Nigeria’s recent monetary policy recalibrations, underpinned by comprehensive reforms and improved foreign exchange management, have contributed to falling lending rates and inflation, strengthening the financial system and supporting economic growth. However, continued vigilance and collaboration among policymakers, regulators, and the media are essential to fully realise the benefits of these gains for Nigerians.
- https://www.thisdaylive.com/2025/11/21/cbn-monetary-policy-adjustments-have-helped-to-lower-lending-rates-amid-disinflation/ – Please view link – unable to able to access data
- https://www.reuters.com/world/africa/nigerias-central-bank-cuts-policy-rate-by-50-basis-points-2025-09-23/ – On September 23, 2025, Nigeria’s central bank reduced its key lending rate by 50 basis points to 27%, marking the first rate cut since 2020. This decision was influenced by a decline in inflation, which fell to 20.12% year-on-year in August, and aimed to stimulate economic growth. The move followed a period of steady rates in 2025 and multiple increases in 2024. Central Bank Governor Olayemi Cardoso noted that the cut was driven by expectations of further inflation decreases and a need to stimulate economic growth. Nigeria faced repeated inflation spikes in 2024, mainly due to President Bola Tinubu’s economic reforms, including the devaluation of the naira and subsidy cuts. However, inflation has declined in 2025, aided by a statistical methodology revision that updated the base year and adjusted item weights in the country’s consumer price index. Economists had anticipated a larger 75 basis point cut in light of recent inflation trends.
- https://www.reuters.com/markets/currencies/nigerias-net-fx-reserves-hit-three-year-high-central-bank-says-2025-04-02/ – Nigeria’s net foreign exchange reserves reached $23.11 billion by the end of 2024, marking the highest in three years, according to the Central Bank of Nigeria (CBN). This increase was attributed to a reduction in short-term foreign exchange liabilities, particularly swaps and forward contracts, and an upswing in non-oil forex inflows. In 2023, net reserves were $3.99 billion, compared to $8.19 billion in 2022 and $14.59 billion in 2021. The CBN cited deliberate policy actions aimed at boosting market confidence and long-term stability as key factors behind this improvement. Gross external reserves also rose to $40.19 billion from $33.22 billion in 2023. Despite a decline in the first quarter of 2025 due to seasonal factors and foreign debt interest payments, the CBN expects a “steady uptick” in reserves in the second quarter, driven by increased oil and non-oil exports.
- https://www.reuters.com/world/africa/moodys-upgrades-nigerias-rating-b3-better-external-fiscal-positions-2025-05-30/ – Moody’s has upgraded Nigeria’s credit rating from “Caa1” to “B3”, recognizing significant improvements in the country’s external and fiscal positions. This decision follows a strong economic performance in 2024, which the World Bank described as Nigeria’s fastest growth in a decade, particularly driven by a robust fourth quarter and enhanced fiscal stability. A key driver behind Moody’s upgrade is Nigeria’s recent overhaul of its foreign exchange management, which improved the balance of payments and boosted the Central Bank of Nigeria’s foreign exchange reserves. Additionally, inflationary risks, previously heightened by policy changes, have started to decline alongside domestic borrowing costs, fostering greater confidence in Nigeria’s economic policies. Although Moody’s revised Nigeria’s outlook from “positive” to “stable,” it expressed confidence that the fiscal and external gains will likely persist, even if at a slower rate should oil prices drop. Overall, the upgrade signals cautious optimism in Nigeria’s economic trajectory and policy resilience.
- https://www.reuters.com/world/africa/nigeria-posts-683-billion-balance-payments-surplus-2024-central-bank-says-2025-04-09/ – In 2024, Nigeria achieved a balance of payments surplus of $6.83 billion, reflecting successful economic reforms and increased investor confidence, according to the Central Bank of Nigeria (CBN). This marks a significant turnaround from deficits of $3.34 billion and $3.32 billion in 2023 and 2022, respectively. President Bola Tinubu’s reform agenda, initiated in 2023, includes the removal of petrol and electricity subsidies, naira devaluation, and ongoing overhauls of the oil and tax sectors. The country’s current and capital accounts recorded a $17.22 billion surplus, aided by a $13.17 billion goods trade surplus. Remittances increased by 8.9% to $20.93 billion, while gas and non-oil exports expanded by 48.3% and 24.6%, respectively. At the same time, fuel imports dropped by 23.2%, and non-oil imports declined by 12.6%. Portfolio investment inflows more than doubled to $13.35 billion, although foreign direct investment fell by 42.3% to $1.08 billion. By the end of 2024, foreign exchange reserves rose by $6 billion to $40.19 billion. CBN Governor Olayemi Cardoso attributed the positive performance to effective policy measures and a firm commitment to macroeconomic stability.
- https://www.reuters.com/world/africa/nigerias-economy-grows-strongly-amid-high-inflation-world-bank-says-2025-05-12/ – In 2024, Nigeria’s economy experienced its strongest growth in a decade, expanding by 4.6% year-on-year in the fourth quarter, according to the World Bank. This growth was fueled by fiscal improvements and bold reforms implemented by President Bola Tinubu, including the removal of petrol subsidies, reduction in electricity allowances, and two devaluations of the naira. Despite these advances, the economy continues to struggle with high inflation. The World Bank projects a 3.6% overall growth rate in 2025. Foreign exchange reforms have led to a more stable and market-reflective exchange rate, helping the central bank replenish official reserves to over $37 billion. Additionally, government revenue rose by 4.5% of GDP in 2024, attributed to subsidy removal, better tax administration, and increased remittances. This revenue boost enabled a reduction in the fiscal deficit from 5.4% in 2023 to 3% in 2024. However, the full benefits of removing the fuel subsidy are yet to be realized. The World Bank emphasized the need for continued tight monetary and disciplined fiscal policies to address inflation challenges.
- https://www.reuters.com/world/africa/nigerias-overnight-lending-rate-falls-100-bps-on-excess-liquidity-policy-shift-2025-09-24/ – Nigeria’s overnight lending rate dropped by 100 basis points to 25.5% due to increased liquidity and a shift in monetary policy. The Central Bank of Nigeria (CBN) recently reduced its benchmark interest rate by 50 basis points to 27%, marking the first rate cut since 2020 as inflation has been easing for five straight months. The market had largely anticipated the rate cut, with yields trending lower in advance. Additionally, banking system liquidity surged by 1.15 trillion naira, reaching a total of 3 trillion naira ($2.02 billion), contributing to heightened money market activity. As part of its policy update, the CBN also narrowed its interest rate corridor: the standing lending facility was reduced to 29.5% from 32.5%, and the deposit facility was lowered to 25.5% from 26.5%. This dovish policy shift reflects attempts to further ease monetary conditions. Analysts are now evaluating the future pace of monetary easing and the potential for more Open Market Operations (OMO) issuances. Despite this move, the market response remained measured as policy rates had already lagged behind market rates.
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
8
Notes:
The narrative presents recent developments, including inflation declining to 16.05% in October 2025 and external reserves exceeding $46 billion. These figures align with recent reports from The Whistler Newspaper, dated November 17, 2025, indicating that the content is current and not recycled. ([thewhistler.ng](https://thewhistler.ng/exclusive-inflation-falls-to-16-05-as-cbn-reforms-boost-nigerias-reserves-to-seven-year-high-of-46-7bn/?utm_source=openai))
Quotes check
Score:
9
Notes:
Direct quotes from Ms. Emem Usoro and Professor Ken Ife are present. A search reveals that these quotes are unique to this narrative, suggesting originality. No identical quotes appear in earlier material, and variations in wording are minimal.
Source reliability
Score:
7
Notes:
The narrative originates from ThisDayLive, a reputable Nigerian news outlet. While it is a single-source report, the information aligns with other reputable sources, such as The Whistler Newspaper. ([thewhistler.ng](https://thewhistler.ng/exclusive-inflation-falls-to-16-05-as-cbn-reforms-boost-nigerias-reserves-to-seven-year-high-of-46-7bn/?utm_source=openai))
Plausability check
Score:
8
Notes:
The claims regarding inflation rates, exchange rate stability, and external reserves are consistent with recent data from The Whistler Newspaper. ([thewhistler.ng](https://thewhistler.ng/exclusive-inflation-falls-to-16-05-as-cbn-reforms-boost-nigerias-reserves-to-seven-year-high-of-46-7bn/?utm_source=openai)) The narrative’s tone and language are appropriate for the topic and region.
Overall assessment
Verdict (FAIL, OPEN, PASS): PASS
Confidence (LOW, MEDIUM, HIGH): HIGH
Summary:
The narrative is current, with no evidence of recycled content. Direct quotes are original and not found elsewhere. The source is reputable, and the claims made are plausible and supported by other reputable outlets. Therefore, the narrative passes the fact-checking criteria with high confidence.