- The Central Bank of Nigeria reduced the Monetary Policy Rate by 50 basis points to 26.5 per cent at the conclusion of its 304th MPC meeting in Abuja
- Governor Olayemi Cardoso said the decision followed easing inflation, which fell to 15.10 per cent in January 2026, alongside improved exchange rate stability and food supply
- The MPC also noted that external reserves rose to $50.45 billion — the highest in 13 years — while cautioning that election-related fiscal spending could pose inflationary risk
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria has reduced the benchmark interest rate to 26.5 per cent, marking the second rate cut under the current leadership of the bank.
The Governor of the Central Bank, Olayemi Cardoso, announced the decision on Tuesday at the conclusion of the MPC’s 304th meeting held in Abuja.
“The Committee decided to reduce the monetary policy rate by 50 basis points to 26.5%,” Cardoso said.
He added that the MPC resolved to retain the Standing Facilities Corridor around the Monetary Policy Rate (MPR) at +50/-450 basis points. The Committee also retained the Cash Reserve Requirement at 45.00 per cent for Deposit Money Banks, 16.00 per cent for Merchant Banks, and 75.00 per cent for non-TSA public sector deposits.
The latest adjustment follows a similar 50-basis-point reduction in September 2025 and a hold at the November 2025 meeting.
Cardoso explained that the decision was based on a “balanced evaluation of risks to the outlook”, noting that the ongoing disinflation trend was expected to continue. He attributed this to the lagged effects of previous monetary tightening, sustained exchange rate stability and improved food supply.
According to the governor, headline inflation eased slightly to 15.10 per cent in January 2026 from 15.15 per cent in December 2025, marking the eleventh consecutive month of year-on-year decline. Food inflation dropped markedly to 8.89 per cent from 10.84 per cent, while core inflation declined to 17.72 per cent from 18.63 per cent.
On a month-on-month basis, headline inflation fell to -2.88 per cent in January, compared with 0.54 per cent in December, signalling a continued softening of price pressures.
Cardoso also highlighted improvements in the external sector, revealing that gross external reserves rose to $50.45 billion as of 16 February 2026 — the highest level in 13 years — providing an import cover of 9.68 months for goods and services. He said the increase was supported by stronger export earnings and rising remittance inflows.
The MPC welcomed the recently issued Presidential Executive Order 09, noting its potential to boost fiscal revenues and strengthen reserves.
On financial sector stability, Cardoso said most key indicators remained within regulatory thresholds. Of the 33 banks that have raised additional capital under the recapitalisation programme, 20 have met the new minimum capital requirements.
Looking ahead, the governor cautioned that increased fiscal releases, including election-related spending, could pose upside risks to inflation. He reaffirmed the MPC’s commitment to price stability and financial system resilience.
The next MPC meeting is scheduled for 19 and 20 May 2026.
CBN, SEC sanction 10 banks for forex violations
Meanwhile, TheRadar reported that the regulatory agencies responsible for overseeing the activities of deposit money banks in Nigeria sanctioned 10 banks for violations of foreign exchange guidelines and other regulatory offences.
These agencies, including the Central Bank of Nigeria and the Securities and Exchange Commission, imposed fines totalling N1.502 billion as penalties within the first six months of 2024.