The Central Bank of Nigeria has reduced the Monetary Policy Rate by 50 basis points to 26.50 percent from 27 percent, marking the first rate cut in recent months.
The apex bank announced the decision during its 304th Monetary Policy Committee meeting held in Abuja on Tuesday. CBN Governor Olayemi Cardoso stated that all members of the MPC unanimously agreed upon the decision.
“The committee decided to reduce the monetary policy rate by 50 basis points to 26.50 per cent,” Cardoso said.
He stated that the liquidity ratio was maintained at 30 percent, and the standing facilities corridor was adjusted to +50 to -450 basis points around the monetary policy rate. The committee retained the Cash Reserve Ratio (CRR) at 45 percent for commercial banks and 16 percent for merchant banks, while the 75 percent CRR on non-TSA public sector deposits was equally maintained.
“The Committee’s decision was premised on a balanced evaluation of risk to the outlook which suggests that the ongoing disinflation trajectory would continue largely supported by the lad transmission of previous monetary tightening, sustained exchange rate stability and enhanced food supply,” Cardoso explained.
He noted that the committee took into account the sustained deceleration in year-on-year headline inflation in January 2026, marking the 11th consecutive month of decline.
“This downward trajectory in inflation was driven mainly by the continued effect of the contractionary monetary policy, stability in the foreign exchange market, robust capital inflows and improvements in the balance of payments. The momentum was further reinforced by relative stability in the prices of petroleum products and improved food supply conditions, especially staples,” he added.
Cardoso stated that the MPC noted the remarkable performance of Nigeria’s external sector, attributing the positive improvement to higher export earnings and increased remittance inflows. “This has contributed to greater stability in the foreign exchange market and bolstered investor confidence,” he said.
He also welcomed the newly issued Presidential Executive Order 09 which redirects oil and gas revenues into the federation account, stating that the order would play a crucial role in improving fiscal revenue.
The last time the apex bank cut interest rates was in September last year. The country’s inflation rate dropped in January to 15.10 percent from 15.15 percent, according to the National Bureau of Statistics.
