CBN slashes MPR to 23%, naira may weaken as savings returns drop

CBN cut the Monetary Policy Rate by 350 basis points to 23% from 26.5% after its 307th MPC meeting, also resetting the Standing Facilities Corridor to +50/-300 basis points around the policy rate. The move, described as a "jumbo cut" by Bismarck Rewane of Financial Derivatives Company, aims to stimulate borrowing but could weigh on the naira.

The naira may face depreciation pressure as returns on local assets fall; it was trading around N1,387 to the dollar in the parallel market, briefly touching N1,390 before settling near N1,387. Rewane noted the naira’s fair value is about N1,150/$ and said any weakening would be limited by that benchmark. Savers see real returns drop from 11.1% to 7.61%, while diaspora inflows could partly replace weaker foreign portfolio investment. Government debt service, estimated at N15.8 trillion, may become cheaper, and corporate margins could improve, helping equity valuations—the Nigerian stock market rose 0.18% after the announcement.

Will you adjust your savings strategy or look for higher-yielding alternatives as naira-denominated returns slip, or hold and watch for possible stability around the N1,150/$ fair value?

SOURCE: https://nairametrics.com/2026/09/23/naira-may-depreciate-following-cbns-350bps-rate-cut-rewane/