CBN Likely to Hold Interest Rate at 26.5% as Inflation Pressures Persist — Analysts
Nigeria’s monetary policy direction is once again in focus as the Central Bank of Nigeria (CBN) prepares for its Monetary Policy Committee (MPC) meeting scheduled for Tuesday, May 19, 2026. Analysts widely expect the apex bank to maintain its Monetary Policy Rate (MPR) at 26.5%, citing persistent inflationary pressures despite recent signs of slower monthly price increases.
Fresh data from the National Bureau of Statistics (NBS) showed that headline inflation climbed to 15.69% year-on-year in April 2026, up from 15.38% in March. This marks the second straight monthly increase, reversing what had previously been a period of gradual disinflation and raising fresh concerns about price stability in Africa’s largest economy.
Economists say the renewed inflationary trend is being driven largely by rising energy costs and external shocks, including geopolitical tensions in the Middle East that pushed up global crude oil prices. These developments have filtered into domestic markets, increasing transportation and production costs for businesses and consumers across Nigeria.
At the same time, signs of slowing economic activity are emerging. The latest Purchasing Managers Index (PMI) dropped to 49.4 points in April, signaling a contraction in business conditions and sparking concerns that Nigeria’s GDP growth could weaken in the near term. Despite these risks, analysts believe the CBN may prefer to hold rates steady to avoid destabilizing the fragile balance between growth and inflation control.
Research firms such as Cordros Research and Quest Merchant Bank expect the MPC to adopt a “wait and see” approach, maintaining the benchmark rate at 26.50% while monitoring global and domestic economic conditions. Although inflation remains within the CBN’s official tolerance band of 14.5% to 18.5%, experts say the central bank is likely to prioritize price stability and investor confidence over aggressive policy shifts at this meeting.
source: Leadership