The Monetary Policy Committee (MPC) of the Central Bank of Nigeria has retained the Monetary Policy Rate (MPR) at 26.5 percent following the conclusion of its 305th meeting held in Abuja.
CBN Governor Olayemi Cardoso announced the decision after the meeting attended by all 11 members of the committee.
The committee also retained all other key monetary policy parameters, underscoring a cautious stance as policymakers continue to monitor inflationary pressures and broader macroeconomic conditions.
According to the apex bank, the decision to keep rates unchanged was driven by persistent inflationary trends and the need to sustain macroeconomic stability.
The Cash Reserve Ratio (CRR) was maintained at 45 percent for commercial banks and 16 percent for merchant banks, while the Standing Facilities Corridor was retained at +50/-450 basis points around the MPR. The CRR on non-TSA public sector deposits was also left unchanged at 75 percent.
The MPC noted the recent rise in inflation, particularly the consecutive increases recorded in March and April 2026.
Nigeria’s headline inflation rate rose to 15.69 percent in April 2026 from 15.38 percent in March, reinforcing concerns over price stability despite earlier signs of moderation.
At its 304th meeting in February 2026, the committee reduced the benchmark interest rate by 50 basis points from 27 percent to 26.5 percent, marking the first rate cut after a prolonged tightening cycle. The Liquidity Ratio was retained at 30 percent during that meeting, while the Standing Facilities Corridor remained at +50/-450 basis points around the MPR.
The central bank has continued to balance efforts to curb inflation with the need to support exchange-rate stability and broader economic recovery.
Analysts had widely projected that the MPC would maintain the benchmark interest rate at its current level amid persistent domestic and global economic uncertainties.
Market observers cited inflationary pressures, exchange-rate volatility, and geopolitical tensions, particularly the recent rise in global crude oil prices linked to the Middle East crisis, as major factors influencing the committee’s decision.
Financial analysts also expect the CBN to remain cautious as it evaluates the impact of previous monetary tightening measures on inflation and economic activity.
The decision to retain rates suggests the MPC remains focused on containing inflation while assessing the broader effects of high borrowing costs on businesses and economic growth.
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.
While higher interest rates typically increase borrowing costs for businesses and consumers, they are also considered a key tool for moderating inflationary pressures.
Nigeria’s business community has repeatedly expressed concerns over elevated borrowing costs and their impact on investment, expansion, and economic productivity.
