Nigeria just reset its benchmark interest rate to 23%. Whether your loan gets cheaper depends on a gap the CBN just admitted to.

The CBN's Monetary Policy Committee cut the MPR from 26.5% to 23% on Tuesday, the biggest single move under Governor Olayemi Cardoso. (Vanguard)

Cardoso didn't call it a routine cut. He called it a "reset," an "operational realignment." The committee said the gap between the official policy rate and what banks were actually charging had grown wide enough to stop the MPR working as a signal. (Tribune)

Manufacturers have been living inside that gap for over a year. In June, with the MPR still at 26.5%, MAN reported its members paying an average prime lending rate of 27%, and as high as 35.6% at some banks. (Nairametrics) That's the exact disconnect Cardoso pointed to on Tuesday.

A 350-basis-point cut doesn't mean your bank's rate falls by 350 basis points. Nigeria's recent history suggests it won't come close. The IMF's own research on Nigeria's banking system found that a 100-point rate hike pushes lending rates up by roughly 175 to 180 points, while an equivalent cut brings them down by only 25 to 30. On that pattern, this reset could move your actual loan rate by somewhere near 90 to 100 points, not 350.

If you're borrowing, that's the range to watch for, not the headline number. If you're holding a Treasury bill, the market had already moved before the CBN made it official. The one-year bill's yield fell across three straight auctions in early September, ahead of Tuesday's decision. Your loan and your government-backed savings are not hearing this news at the same speed.

Nigeria's rates have done this before. The gap always closes slower than the cut.