Financial Experts Divided as CBN Slashes Benchmark Interest Rate to 23%

Mixed reactions have trailed the Central Bank of Nigeria’s (CBN) historic decision to slash its benchmark interest rate by 350 basis points, bringing the Monetary Policy Rate (MPR) down from 26.5 percent to 23 percent.

While the apex bank defended the aggressive monetary easing as a necessary recalibration to align with moderating inflation and foreign exchange stability, economic stakeholders remain sharply split over its immediate implications for businesses and the wider economy.

The policy shift has drawn applause from the real sector and the capital markets. Dr. Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), described the reduction as a timely and welcome relief. According to Yusuf, high borrowing expenses have long constrained productive investments, making the policy adjustment a vital window to lower capital costs, boost business cash flows, and stimulate industrial capacity. Similarly, capital market leaders noted that the adjustment has already triggered positive asset repricing and renewed momentum on the trading floor.

However, skepticism persists among other trade and logistics groups. Mr. Lucky Amiwero, National President of the National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), dismissed the 3% slash as insufficient to spark meaningful economic activity. Amiwero argued that a 23 percent policy rate still leaves commercial lending excessively expensive for Micro, Small, and Medium Enterprises (MSMEs), compounding existing structural hurdles like erratic electricity and poor transport networks.

Financial analysts have also emphasized that the ultimate success of the policy will depend heavily on transmission efficiency, specifically whether commercial deposit banks will readily lower lending rates for real sector operators without squeezing profit margins or tightening credit availability. As the debate unfolds, stakeholders continue to watch how the apex bank will balance growth-driven easing with ongoing defense against latent inflationary pressures.