For the first time in half a decade, the Central Bank of Nigeria (CBN) has lowered its key lending rate, signalling a cautious shift toward growth-friendly policies.

At the end of its Monetary Policy Committee (MPC) meeting in Abuja, the Central Bank of Nigeria reduced the Monetary Policy Rate (MPR) by 50 basis points to 27%.

The move, officials say, balances two priorities: supporting economic recovery and ensuring inflation remains under control.

However, following the apex bank’s interest rate cut, commercial banks have begun aligning their interest rate products with the new MPR.

Union Bank releases new interest rates

Due to the development, banks have begun notifying their customers via email, announcing changes and adjustments to their interest rate products.

Union Bank disclosed in one of its emails that it has adjusted its interest rate to 8.1% per annum, effective Wednesday, October 1, 2025.

“With the Central Bank of Nigeria’s recent review of the Monetary Policy Rate (MPR) and current realities, the interest rate on our savings account has been adjusted to 8.1% per annum, effective Wednesday, 1st October 2025.

“As your trusted partner, we remain committed to supporting your goals.” Other banks like Access Bank, UBA, Zenith Bank, and other financial institutions are expected to join in announcing new interest rates on their products.

Financial analysts disclosed that the CBN mandates banks to pay a minimum interest rate on savings deposits, which must be at least 10% of the MPR.

Analysts note that the CBN mandates that banks pay a minimum interest rate on savings deposits, which must be at least 10% of the MPR.

They say that banks are expected to set interest rates for other local currency loans and advances to align with the MPR.

However, specific rates are negotiable and depend on several factors, such as the customer’s risk profile.

Experts have predicted that commercial banks will begin to lower their interest rates on loans from next year.

Also, other naira-denominated instruments, such as FGN bonds and Treasury Bills, will experience rate cuts.