The Central Bank of Nigeria (CBN) has reduced its benchmark interest rate, the Monetary Policy Rate (MPR), by 50 basis points, bringing it down to 26.50 percent from 27 percent. The decision was announced during the bank’s 304th Monetary Policy Committee (MPC) meeting in Abuja on Tuesday.
CBN Governor Olayemi Cardoso said the move was unanimously approved by all MPC members. He added that the liquidity ratio will remain at 30 percent, while the standing facilities corridor has been adjusted to +50 to -450 basis points around the MPR.
The committee also maintained the Cash Reserve Ratio (CRR) at 45 percent for commercial banks and 16 percent for merchant banks. The 75 percent CRR on non-Treasury Single Account (TSA) public sector deposits was equally retained.
Governor Cardoso explained that the decision reflects a balanced evaluation of economic risks, noting that Nigeria’s ongoing disinflation trend is expected to continue. The downward movement in inflation has been supported by the delayed effects of previous monetary tightening, sustained exchange rate stability, and improved food supply.
He highlighted that year-on-year headline inflation declined for the 11th consecutive month in January 2026. Factors driving this trend include the contractionary monetary policy, stability in the foreign exchange market, strong capital inflows, and improvements in the balance of payments. Additional support came from stable petroleum prices and better food supply, particularly staple commodities.
Cardoso also praised the performance of Nigeria’s external sector, citing higher export earnings and increased remittance inflows as key contributors to foreign exchange stability and improved investor confidence.
The MPC welcomed the recently issued Presidential Executive Order 09, which channels oil and gas revenues into the federation account, noting its potential to boost fiscal revenue.
The CBN uses the MPR to regulate inflation, maintain macroeconomic stability, and manage liquidity in the economy. The last adjustment to the MPR was in September 2025, when it was increased to 27 percent.
CBN Lowers Interest Rate to 26.50% as Inflation Continues to Ease
