Market News

by Collins Nweze | Assistant Business Editor

The Central Bank of Nigeria (CBN’s) decision adjusting the Standing Facility corridor around the Monetary Policy Rate (MPR) at +50/-450 basis points, represents sanction against banks not keen on lending to real sector.

By adjusting the Standing Facility corridor around the MPR from +250/-250 basis points to +50/-450 basis points, banks taking excess deposits to CBN instead of lending to businesses, will now be paid 450 basis points below the 27 per cent benchmark interest rate.

The Monetary Policy Committee (MPC’s) decision was underpinned by the need to sustain the progress made so far towards achieving low and stable inflation. The MPC reaffirmed its commitment to a data-driven assessment of developments and outlook to guide future policy decisions.

Managing Director, Financial Derivatives Company (FDC) Limited, Bismarck Rewane, said that by reducing the amount CBN pays to banks taking idle funds to its vaults, the apex bank will accelerate lending.

According to him, for the MPC to adjust the asymmetric corridor, means that the apex bank will not be paying much to banks for keeping money idle at the central bank, which is the key thing.

Rewane explained that the CBN’s decision, which signals positive yields on short-term assets, will continue to strengthen portfolio capital inflows, support the naira, and reinforce the disinflation path.

He said: “The MPC’s decision also reflects current global trends emphasizing central bank autonomy and independence, as seen in most advanced economies,” he said.

“The next MPC meeting is in February 2026. In the coming 90 days, a cautious “wait-and-see” approach is expected, with T-bill rates and debt management policies under close scrutiny. The naira will likely trade in a range of N1,450–N1,500/$ in the near term, while GDP growth is projected at 3.9 per cent in 2025 and 4.2 per cent in 2026. However, 2026 presents key risks of imponderables and exogenous shocks, including a likely fall in the price of Brent to $55pb”.

Other analysts said that Monetary Policy is always conducted by influencing monetary and credit conditions to achieve set macroeconomic goals, and by adjusting the Standing Facility corridor around the MPR, the intension is to boost lending to the domestic economy.

The CBN’s money and credit statistics showed that credit to private sector stood at N74.41 trillion credit in October 2025, representing improvement from N72.53 trillion in September, an increase of about N1.88 trillion.

It represented the strongest positive movement so far in 2025.

On a year-on-year basis, credit to the private sector increased only slightly, from N74.07 trillion in October 2024 to N74.41 trillion in October.

The modest annual gain shows that while the stock of private credit is broadly back to where it was a year earlier, the real story is the short-term rebound that followed the September rate cut.

CBN Governor, Olayemi Cardoso said MSMEs remain central to our efforts. This year alone, microfinance lending expanded by over 14 per cent, and new digital-credit products reached more than 1.2 million small enterprises — evidence of the sector’s growing depth and capacity. We are improving access to credit, supporting microfinance institutions, and expanding financial products tailored to smaller enterprises.

 “The Central Bank of Nigeria will continue to steer monetary policy with discipline, anchored firmly to its core mandate of price stability. Stability remains the bedrock upon which investment flourishes, resources are allocated efficiently, and purchasing power is protected. In 2026, we will deepen engagement with stakeholders, strengthen collaboration with other regulators and international partners, and foster responsible innovation across the financial system,” he said.