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The short answer
An MPR change travels in stages: first to the CBN's overnight lending and deposit rates, then to interbank and Treasury bill rates, and only later to the rates banks set on loans and savings. After the 22 September 2026 cut from 26.5% to 23%, the 91-day T-bill stop rate fell from 16.30% to 15.50% at the next day's auction. Loan and deposit rates move more slowly, because banks reprice on their own timetables and fixed-rate contracts do not change.
The transmission chain
- MPC decision. The MPR and the corridor are set; on 22 September 2026, the MPR went to 23%, the lending facility to 23.5% and the deposit facility to 20%.
- Overnight and interbank rates. Banks lending to each other overnight price inside the new corridor, often from the next day.
- Treasury bills and OMO. Auction rates reprice at the next sale. The 23 September 2026 auction cleared at 15.50%, 15.80% and 15.89% for 91, 182 and 364 days, down from 16.30%, 16.50% and 16.62%.
- Bank funding costs. As deposits and interbank borrowing get cheaper, banks' cost of funds falls over weeks and months.
- Loan and deposit rates. Banks reprice new loans, variable loans and savings products as their own costs and competition allow.
How fast each link moves
| Link | Typical speed | Why |
|---|---|---|
| Overnight and interbank | Days | Priced directly against the corridor |
| T-bill and OMO yields | Next auction | New bids reflect the new benchmark |
| Savings floor | When the bank applies it | Tied by CBN rule to 30% of the MPR |
| New loans | Weeks to months | Banks reprice as funding costs change |
| Existing fixed-rate loans | Not at all | Rate fixed by contract |
There is no official CBN figure for the delay at each stage; these are the patterns the mechanics imply.
What it means for savers
A cut lowers the floor on savings interest, because the CBN rule sets the minimum at 30% of the MPR. At 26.5% the floor was 7.95%; at 23% it is 6.9%. Worked example: ₦1,000,000 saved for a year at each floor earns ₦79,500 or ₦69,000 before tax, a drop of ₦10,500. Fixed deposits already booked keep their agreed rate until maturity, which is why locking in before an expected cut can pay. See the minimum savings rate rule and fixed deposit vs savings account.
What it means for borrowers
- New loans may get cheaper over the following months, but the risk premium and fees do not fall with the MPR.
- Variable-rate loans change only when your agreement allows and the bank reprices; check the clause, which often refers to the bank's prime rate.
- Fixed-rate loans are unaffected.
- A rise works the same way in reverse, but banks tend to pass rises on faster. See why your loan rate differs from the MPR.
Expectations move first
Markets do not wait for the decision. Before the July 2026 meeting, most analysts quoted by BusinessDay expected the MPR to be held at 26.5%, and it was. A surprise moves rates more than an expected decision does, because the expected part is already priced in. The September 2026 cut of 350 basis points was large, and T-bill stop rates fell across all three tenors at the very next auction. For savers, that means the best time to lock in a fixed rate is often before a widely expected cut, not after it, while borrowers on variable loans benefit only once their bank reprices.
What can block the chain
If the CRR stays high (45% for deposit money banks as at October 2026), banks' cost of funds stays elevated even when the MPR falls. Heavy OMO sales or government borrowing can keep yields up. And if banks expect inflation to rise again, they may hold loan rates where they are.
Where Pryme fits
Pryme Savings Boxes show their current rates in the app before you commit, and Loans on Spaces show the full cost and repayment date before you accept. See Savings Boxes and Loans on Spaces.
Questions people ask
When will my bank reduce loan interest after the MPR cut?
Only when it reprices. New loans may change within weeks or months; fixed-rate loans keep their agreed rate.
Will my savings interest drop after the MPR cut?
It can. The CBN minimum savings rate is 30% of the MPR, so the floor fell from 7.95% to 6.9% after the September 2026 cut.
Why did Treasury bill rates fall after the MPC meeting?
T-bills reprice at each auction. After the September 2026 cut, the 91-day stop rate fell from 16.30% to 15.50% at the next day's auction.
Does an MPR rise make loans more expensive straight away?
Not for existing fixed-rate loans. New and variable-rate loans usually reprice over the following weeks.
Sources
- CBN: Monetary Policy Decisions · accessed Oct 2026
- Arise News: CBN cuts MPR to 23% from 26.5% as MPC revises policy (22 Sep 2026) · accessed Oct 2026
- Nairametrics: NTB stop rates crash across tenors after CBN's 350bps rate cut (24 Sep 2026) · accessed Oct 2026
- ICIR: CBN increases interest on savings deposits to 4.2% (16 Aug 2022) · accessed Oct 2026
- BusinessDay: preview of the 306th MPC meeting, analysts expect MPR hold (20 Jul 2026) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.