CBN Cuts Interest Rate to 26.5%

The Central Bank of Nigeria (CBN) on Tuesday reduced its benchmark Monetary Policy Rate (MPR) by 50 basis points, bringing it down from 27 per cent to 26.5 per cent, signaling a cautious but supportive stance on the economy.

The decision was taken at the 304th meeting of the Monetary Policy Committee (MPC) held in Abuja, with all 11 members present. CBN Governor, Mr. Olayemi Cardoso, announced the outcome, emphasizing the bank’s commitment to maintaining macroeconomic stability.

“The decision to cut the benchmark rate was driven by sustained improvements in key macroeconomic indicators, particularly inflation,” the MPC said in its statement.

Headline inflation declined for the eleventh consecutive month, falling to 15.1 per cent in January 2026.

“This reflects continued price moderation,” the committee added.

Other monetary policy tools were largely maintained to ensure financial system stability. The Cash Reserve Ratio (CRR) was retained at 45 per cent for commercial banks and 16 per cent for merchant banks, while the Liquidity Ratio remained at 30 per cent. The Standing Facilities Corridor was fixed at +50/-450 basis points around the MPR.

This rate cut marks the lowest benchmark rate since May 2024, when the MPR was set at 26.25 per cent, following a period of consecutive increases in response to inflationary pressures.

“Although inflationary pressures are easing, maintaining other policy parameters reflects a cautious stance aimed at safeguarding financial system stability,” the MPC said.