The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has retained the Monetary Policy Rate (MPR) at 26.5% following the conclusion of its 305th meeting.
The decision was announced by CBN Governor Olayemi Cardoso after the MPC meeting held in Abuja, where 11 committee members were in attendance.
The committee also retained all other key monetary policy parameters, reflecting a cautious approach as policymakers continue to monitor inflationary pressures and broader macroeconomic conditions.
What the apex bank is saying
The CBN said the decision to hold rates steady was influenced by persistent inflationary pressures and the need to sustain macroeconomic stability.
- The Cash Reserve Ratio (CRR) was maintained at 45% for commercial banks and 16% for merchant banks.
- The Standing Facilities Corridor was retained at +50/-450 basis points around the MPR.
- The apex bank also retained the CRR on non-TSA public sector deposits at 75%.
The committee noted the recent rise in inflation figures, particularly the back-to-back increases recorded in March and April 2026.
Get up to speed
Nigeria’s inflation rate has continued to shape monetary policy decisions in recent months despite signs of moderation earlier in the year.
- Nigeria’s headline inflation rate rose to 15.69% in April 2026 from 15.38% recorded in March 2026.
- At its 304th meeting in February 2026, the MPC reduced the MPR by 50 basis points from 27% to 26.5%, marking the first rate cut after an extended tightening cycle.
- The Liquidity Ratio was retained at 30% during the February meeting.
- The Standing Facilities Corridor was also maintained at +50/-450 basis points around the MPR.
The CBN has continued to balance inflation control with efforts to support exchange-rate stability and broader economic recovery.
More Insights
- Market analysts speaking on Nairametrics’ Drinks and Mics podcast had projected a hold decision ahead of the MPC meeting.
- The analysts cited inflationary pressures, exchange-rate concerns, and geopolitical risks as key reasons for maintaining the current policy stance.
- The recent rise in global crude oil prices and renewed geopolitical tensions in the Middle East have increased concerns over imported inflation risks.
- Financial market participants also expect the CBN to remain cautious as it assesses the impact of previous monetary tightening measures on inflation and economic activity.
The decision to hold rates steady suggests that the MPC remains focused on containing inflation while monitoring the broader impact of high borrowing costs on businesses and economic growth.
What you should know
The Monetary Policy Rate serves as the benchmark interest rate used by the CBN to influence lending rates, liquidity conditions, inflation, and overall macroeconomic stability.
- Higher interest rates generally increase borrowing costs for businesses and consumers but may help moderate inflationary pressures.
- Nigeria’s business community has repeatedly raised concerns over elevated borrowing costs and their impact on investment and expansion.
- Inflation has remained one of the major policy concerns for the CBN despite some moderation compared to 2025 levels.
