Nigeria’s Central Bank has reduced its benchmark interest rate by 50 basis points to 27%, marking the first cut in five years. The move comes amid a steady slowdown in inflation, which fell to 20.1% in August 2025—the fifth consecutive month of cooling price growth.
The rate cut aims to stimulate domestic investment and consumer spending, offering relief to businesses burdened by high borrowing costs. Cheaper credit could also attract foreign investors seeking higher yields, potentially boosting capital inflows into the country.
Central bank officials are walking a fine line, supporting economic growth while maintaining price stability. Analysts note that Nigeria’s move aligns with global trends, as several emerging markets ease monetary policy in response to slowing global demand.
Sectors such as real estate, manufacturing, and fintech are expected to benefit the most from lower interest rates, with some experts predicting a modest economic rebound in the coming months.
