*External Reserves Hit $43bn as Recapitalisation Gains Momentum *14 Banks Meet Fresh Capital Threshold Ahead of Deadline By Muhammad Farouk ...
*External Reserves Hit $43bn as Recapitalisation Gains Momentum
*14 Banks Meet Fresh Capital Threshold Ahead of Deadline
By Muhammad Farouk
In a bold move aimed at stimulating economic growth and easing credit conditions, the Central Bank of Nigeria (CBN) has reduced the Monetary Policy Rate (MPR) by 50 basis points—from 27.5% to 27%—marking the first interest rate cut since 2020. The decision, announced by CBN Governor Yemi Cardoso at the end of the 302nd Monetary Policy Committee (MPC) meeting in Abuja, is seen as a calculated shift away from years of aggressive monetary tightening.
Governor Cardoso revealed that 14 Nigerian banks have fully met the new capital requirements under the ongoing recapitalisation exercise, a development he described as “a strong indicator of progress and resilience in the banking sector.”
“This policy direction is anchored
on sustained disinflation, robust external reserves, and positive growth
projections,” Cardoso stated.
Key
Monetary Policy Adjustments
- MPR: Cut
to 27%
- CRR for Commercial Banks: Reduced to 45%
- CRR for Merchant Banks: Retained at 16%
- Standing Lending/Deposit Corridor: Adjusted to +250/-250 basis points
- Liquidity Ratio:
Maintained at 30%
- New CRR on Non-TSA Public Sector Deposits: 75%
According to Cardoso, the decision
to loosen credit conditions stems from a five-month trend of
disinflation and improved macroeconomic indicators, including a more stable
exchange rate and rising foreign reserves.
External
Reserves Climb to $43.05bn
In a further boost to investor confidence, the CBN disclosed that Nigeria’s gross external reserves now stand at $43.05 billion, up from $40.51 billion in July—providing 8.28 months of import cover.
The country’s current account also posted a surplus
of $5.28 billion in Q2 2025, compared to $2.85 billion in Q1.
Recapitalisation
Progress Report
The ongoing recapitalisation
requires:
- N500 billion
for international commercial banks
- N200 billion
for national banks
- N50 billion
for regional commercial and merchant banks
- N20 billion
for national non-interest banks
- N10 billion
for regional non-interest banks
Cardoso said the MPC acknowledged “the successful termination of forbearance measures and single obligor waivers,” which he noted were instrumental in strengthening risk management and transparency in the banking system.
“The impact of the removal of
forbearance is transitory and does not pose a threat to the soundness of the
financial system,” he assured.
Private
Sector Reacts
Reacting to the policy shift, the Centre for the Promotion of Private Enterprise (CPPE) described it as a “timely intervention” to support economic expansion.
“This is a strategic and welcome departure from prolonged monetary tightening,” said Dr. Muda Yusuf, CPPE Director. “The 75% CRR on non-TSA deposits is a smart move to mop up excess liquidity while cushioning inflationary threats.”
Despite signs of
macroeconomic stability, the CBN warned of excess liquidity risks
resulting from increased fiscal inflows and urged continued vigilance. “Preserving
macroeconomic gains while supporting credit growth is our dual priority,”
Cardoso noted. As Nigeria inches toward full implementation of the
recapitalisation roadmap, stakeholders say the CBN’s policy easing could set
the stage for renewed investor confidence, cheaper lending, and sustainable
economic rebound.
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