CBN cuts MPR to 26.5% but CPPE warns of weak lending rate transmission
The Central Bank of Nigeria (CBN) reduced the Monetary Policy Rate (MPR) by 50 basis points to 26.5% from 27% at its 304th meeting on February 24, 2026. While welcoming the rate cut, the Centre for the Promotion of Private Enterprise (CPPE) expressed concern about structural bottlenecks limiting the impact on businesses. CPPE noted that despite the MPR reduction, lending rates remain elevated due to high Cash Reserve Ratio (CRR), elevated deposit costs, risk premiums, crowding-out effects from government borrowing, and high banking operating costs. The think tank emphasized that improving policy transmission to lower borrowing costs for manufacturers, SMEs, agriculture, and other sectors requires addressing these structural rigidities. CPPE stressed that monetary easing must reach the real economy to deliver meaningful growth outcomes, calling for complementary measures to ease liquidity constraints and improve credit-risk frameworks.