The Central Bank of Nigeria (CBN) has once again maintained the Monetary Policy Rate (MPR) at 26.5 percent, signaling a cautious approach to managing inflation and safeguarding economic stability. The decision was announced by CBN Governor Olayemi Cardoso following the Monetary Policy Committee’s (MPC) 306th meeting in Abuja, marking the second time in 2026 that the benchmark interest rate has remained unchanged.
Alongside the retention of the MPR, the committee also left other key monetary indicators untouched. The asymmetric corridor around the MPR remains at +500/-100 basis points, while the Cash Reserve Ratio (CRR) stays at 40.5 percent for deposit money banks and 16 percent for merchant banks. The liquidity ratio was also maintained at 30 percent. According to Cardoso, the move allows policymakers to closely monitor economic developments before making any further adjustments.
The CBN governor explained that although Nigeria’s inflation rate eased slightly to 15.91 percent in June 2026—the first decline recorded in three months—global uncertainties continue to pose significant risks. He pointed to renewed tensions in the Middle East as a major concern, warning that escalating geopolitical conflicts could disrupt global markets and trigger fresh inflationary pressures. As a result, the committee opted to maintain a cautious monetary stance while keeping a close watch on emerging economic trends.
Despite these external challenges, Cardoso expressed confidence in the resilience of Nigeria’s economy, attributing its stability to ongoing fiscal and monetary reforms. He noted that improved coordination between the Federal Government and the CBN has strengthened policy effectiveness and enhanced the country’s ability to withstand external shocks. The committee also welcomed the positive outcome of the banking sector recapitalisation programme, highlighting stronger financial soundness indicators across the banking industry.
Looking ahead, the MPC expects inflation to continue moderating but remains alert to risks, particularly from rising food prices and global instability. Cardoso reaffirmed the committee’s commitment to maintaining price stability and ensuring a healthy financial system, while urging continued supervision of financial institutions to safeguard economic growth. The latest decision aligns with the views of several economists who had recommended holding rates steady, citing persistent food inflation despite broader improvements in headline inflation.
source: The cable
