The Central Bank of Nigeria
has reduced its benchmark interest rate by 50 basis points, lowering the Monetary
Policy Rate (MPR) to 26.50 percent from 27 percent.
The decision was announced at the conclusion
of the bank’s 304th Monetary Policy Committee (MPC) meeting in
Abuja on Tuesday, February 24. CBN Governor Olayemi Cardoso
said the move was unanimous among committee members.
“The committee decided to reduce the monetary
policy rate by 50 basis points to 26.50 percent,” Cardoso stated. He added that
the liquidity ratio was retained at 30 percent, while the standing facilities
corridor was set at +50 and -450 basis points around the MPR. The Cash Reserve
Ratio (CRR) remained at 45 percent for commercial banks and 16 percent for merchant
banks, with the 75 percent CRR on non-TSA public sector deposits unchanged.
Cardoso explained that the rate cut followed
a balanced assessment of risks to the economic outlook, noting that year-on-year
headline inflation decelerated in January 2026 for the 11th consecutive month.
“The Committee’s decision was premised on a
balanced evaluation of risk to the outlook which suggests that the ongoing
disinflation trajectory would continue, largely supported by the lagged effects
of previous monetary tightening, sustained exchange rate stability, and
enhanced food supply,” he said.
He attributed the decline in inflation to
earlier contractionary policies, stability in the foreign exchange market,
robust capital inflows, and improvements in the balance of payments. Relatively
stable petroleum prices and improved availability of staple foods also
contributed to the trend.
Highlighting a strong performance in
Nigeria’s external sector, Cardoso pointed to higher export earnings and
increased remittance inflows, noting that these factors “have contributed to
greater stability in the foreign exchange market and bolstered investor
confidence.”
The governor also welcomed Presidential
Executive Order 09, which channels oil and gas revenues into the
federation account, saying it would play a key role in improving fiscal
revenue.
The MPR serves as the benchmark rate used by
the CBN to manage inflation, liquidity, and overall macroeconomic stability.
The rate had last been retained at 27 percent in November 2025, while the
previous cut occurred in September 2025.
According to the National Bureau of
Statistics, Nigeria’s inflation rate fell slightly in January 2026 to
15.10 percent from 15.15 percent.
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