The Central Bank of Nigeria (CBN) has reduced the Monetary Policy Rate (MPR) by 50 basis points, bringing it down to 26.50 percent from 27 percent, citing the ongoing disinflationary trend in the economy.
The decision was announced on Tuesday at the bank’s 304th Monetary Policy Committee (MPC) meeting in Abuja, where all members of the MPC unanimously agreed on the rate cut.
“The committee decided to reduce the monetary policy rate by 50 basis points to 26.50 percent,” said CBN Governor Olayemi Cardoso.
Cardoso stated that other key monetary parameters were maintained, including the liquidity ratio at 30 percent, the standing facilities corridor at +50 to -450 basis points around the MPR, and the Cash Reserve Ratio (CRR) at 45 percent for commercial banks and 16 percent for merchant banks.
The 75 percent CRR on non-TSA public sector deposits was also retained.
Explaining the rationale for the decision, the governor highlighted the 11th consecutive month of year-on-year headline inflation decline in January 2026.
He attributed the trend to the “continued effect of the contractionary monetary policy, stability in the foreign exchange market, robust capital inflows and improvements in the balance of payments.”
“The momentum was further reinforced by relative stability in the prices of petroleum products and improved food supply conditions, especially staples. These outcomes have indicated that prior tightening has continued to anchor expectations,” Cardoso added.
The MPC also noted improvements in Nigeria’s external sector, with the governor citing higher export earnings and increased remittance inflows as key factors contributing to foreign exchange stability and enhanced investor confidence.
He further welcomed the Presidential Executive Order 09, which channels oil and gas revenues into the federation account, describing it as a policy that will “play a crucial role in improving fiscal revenue.”
The rate cut marks the CBN’s continued effort to balance inflation control with support for economic growth, signaling confidence that monetary tightening measures implemented over the past months are yielding results.
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