Raphael Kanu
Fourteen Nigerian banks have fully met the Central Bank of Nigeria’s (CBN) new capital requirements under its ongoing recapitalisation programme, Governor Yemi Cardoso announced yesterday in Abuja.
Speaking after the 302nd meeting of the Monetary Policy Committee (MPC), Cardoso said the recapitalisation exercise was on track, urging continued implementation of policies to strengthen the banking system.
The new capital thresholds, introduced earlier this year, require commercial banks with international authorisation to hold ₦500 billion, those with national authorisation ₦200 billion, and regional authorisation ₦50 billion. Merchant banks are required to hold ₦50 billion, while non-interest banks must maintain ₦20 billion for national and ₦10 billion for regional operations.
Cardoso said the successful termination of forbearance measures and waivers on single obligor limits had improved transparency, risk management, and financial stability.
At the same meeting, the CBN cut the Monetary Policy Rate (MPR) by 50 basis points, from 27.5 percent to 27 percent — the first reduction in three years. The Cash Reserve Ratio (CRR) for commercial banks was reduced to 45 percent from 50 percent, while that of merchant banks was retained at 16 percent. The Liquidity Ratio also remained unchanged at 30 percent.
The MPC further introduced a 75 percent CRR on non-Treasury Single Account (TSA) public sector deposits to manage excess liquidity in the system.
Cardoso explained that the decision to ease monetary policy was supported by five consecutive months of disinflation, projections of lower inflation for the rest of 2025, and improved macroeconomic indicators such as stable exchange rates, output growth, and stronger reserves. Nigeria’s external reserves stood at $43.05 billion as of September 11, compared to $40.51 billion in July, giving an import cover of 8.28 months.
“The stability in the macroeconomic environment offered some headroom for monetary policy to support economic growth and recovery,” Cardoso said, while warning that excess liquidity from fiscal operations posed risks to stability.
Mixed Reactions
The Nigeria Employers’ Consultative Association (NECA) welcomed the modest rate cut, describing it as a relief after sustained disinflation, but warned that households still face high food inflation at 21.87 percent.
The Centre for the Promotion of Private Enterprise (CPPE) said the 75 percent CRR on non-TSA deposits was necessary to contain liquidity risks, while the Association of Small Business Owners of Nigeria (ASBON) described the cut as positive but cautioned that its impact on lending rates may not be immediate.
Market analyst David Adonri, Vice Executive Chairman of Highcap Securities Limited, warned that insecurity and global commodity volatility could undermine the sustainability of the policy shift.
Despite the concerns, the consensus is that the CBN has signalled a new balance between inflation control and economic growth — a direction many say is long overdue.