Nigeria’s central bank cut its benchmark interest rate to 23% on Tuesday, a 350-basis-point reduction from 26.5%.
The Central Bank of Nigeria announced the decision after the 307th Monetary Policy Committee meeting.
The committee also reset the standing facilities corridor to +50 and –300 basis points around the new monetary policy rate.
Cash reserve requirements were left unchanged at 45% for deposit money banks and 16% for merchant banks.
A 75% reserve requirement on non-TSA public sector deposits was also retained.
The new corridor puts the standing lending facility at 23.50% and the standing deposit facility at 20%.
The cut is far larger than most forecasts ahead of the two-day meeting in Abuja.
The rate had been kept at 26.5% since February, when the committee delivered a 50-basis-point cut.
It then held that level in May and July as inflation cooled only gradually.
Headline inflation had eased for three straight months, reaching 15.39% in August from 15.43% in July.
Food inflation also fell in August, its first decline in about six months, strengthening the case for easier policy.
Even so, the policy rate had remained more than 11 percentage points above August inflation, leaving conditions highly restrictive.
Global oil prices above $100 a barrel and pre-election spending risks had been cited as reasons for caution.
