The Central Bank of Nigeria (CBN) has retained its benchmark interest rate at 26.5 per cent, as policymakers weighed moderating inflation, stronger external reserves and growing global economic uncertainties.
CBN Governor, Olayemi Cardoso, announced the decision on Wednesday at the end of the two-day 305th meeting of the Monetary Policy Committee (MPC) in Abuja.
The committee voted to retain all key monetary policy parameters, keeping the Monetary Policy Rate (MPR) at 26.5 per cent.
It also retained the Cash Reserve Ratio (CRR) at 45 per cent for commercial banks, 16 per cent for merchant banks and 75 per cent for non-TSA public sector deposits.
The standing facilities corridor was also maintained at +50/-450 basis points around the MPR.
Cardoso said the committee’s decision reflected evolving domestic and global economic conditions, including moderating inflation trends, improved economic growth and persistent geopolitical risks.
According to him, inflationary pressures showed signs of easing in April 2026, with month-on-month inflation moderating to 2.13 per cent from 4.18 per cent in March, driven by declines in both food and core inflation components.
He added that Nigeria’s economy maintained growth momentum, with real Gross Domestic Product (GDP) expanding by 4.0 per cent in the fourth quarter of 2025, slightly above the 3.98 per cent recorded in the preceding quarter.
The growth, he said, was supported by stronger performance in the agriculture and industrial sectors.
Cardoso noted that the non-oil sector grew by 3.99 per cent year-on-year in the fourth quarter of 2025, up from 3.0 per cent in the previous quarter, largely driven by activities in services, including information and communication, transportation and storage.
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He said growth in the oil sector also improved to 6.79 per cent from 5.84 per cent, supported by increased refining activities in the downstream petroleum sector.
The CBN governor also highlighted stronger external reserves, which rose to $49.49 billion in May 2026 from $48.35 billion at the end of March.
According to him, the reserve position is enough to cover 9.4 months of imports for goods and services, a development he said “continues to reinforce investment confidence in the Nigerian economy and support exchange rate stability.”
On the global outlook, Cardoso said economic growth is expected to slow in 2026 due to heightened geopolitical tensions, disruptions in energy markets and tighter global financial conditions.
He noted that global inflation may edge higher in the near term because of rising energy and agricultural commodity prices and continued supply chain disruptions.
“Most central banks have embarked on a cautious, data-driven approach, broadly pausing or postponing monetary easing,” he said.
Despite emerging risks linked to tensions in the Middle East, Cardoso said Nigeria’s inflation outlook is expected to remain resilient in 2026.
“Available projections indicate a moderate increase in inflation in the near term; however, the combined effects of previous policy tightening, exchange rate stability and enhanced food supply are expected to support the return to disinflation,” he said.
“In the light of evolving domestic and global uncertainties, the committee reaffirmed its commitment to a forward-looking and evidence-based policy framework,” Cardoso added.
He said the MPC remained focused on its primary mandate of maintaining price stability while preserving the soundness and resilience of Nigeria’s financial system.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X