CBN has reduced interest rate to 26.5%.
Glamtush reports that the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has reduced the benchmark interest rate to 26.5% per cent.
This news platform understands that this was the second time the MPC would be cutting rates under the current leadership of the apex bank.
The CBN Governor, Olayemi Cardoso, announced the decision on Tuesday at the end of the committee’s 304th meeting in Abuja.
Cardoso said, “The Committee decided to reduce the monetary policy rate by 50 basis points to 26.5%.”
He added that the MPC also resolved to “retain the Standing Facilities Corridor around the MPR at +50/-450 basis points” and to “retain the Cash Reserve Requirement for Deposit Money Banks at 45.00 per cent, Merchant Banks at 16.00 per cent, and 75.00 per cent for non-TSA public sector deposits.”
This marks the second rate cut under the current leadership of the apex bank, following a similar 50-basis-point reduction in September 2025 and a hold at the November 2025 meeting.
Cardoso said the decision was based on “a balanced evaluation of risks to the outlook,” which indicates that “the ongoing disinflation trajectory would continue, largely supported by the lagged transmission of previous monetary tightening, sustained exchange rate stability, and enhanced food supply.”
He noted that headline inflation eased to 15.10 per cent in January 2026 from 15.15 per cent in December 2025, marking the eleventh consecutive month of year-on-year decline.
According to the governor, “Food inflation declined markedly to 8.89 per cent from 10.84 per cent,” while “core inflation declined to 17.72 per cent from 18.63 per cent.”
On a month-on-month basis, headline inflation fell to -2.88 per cent in January from 0.54 per cent in December, which the committee said signalled “a continued softening of price pressures.”
Cardoso highlighted improvements in the external sector, stating that gross external reserves rose to $50.45bn as of February 16, 2026, “the highest in 13 years,” providing an import cover of 9.68 months for goods and services.
He said the accretion to reserves was supported by higher export earnings and increased remittance inflows, contributing to foreign exchange stability and investor confidence.
The governor also referenced the newly issued Presidential Executive Order 09, which redirects oil and gas revenues into the Federation Account.
The committee “welcomed” the order and “acknowledged the potential impact of this Order in improving fiscal revenue and accretion to reserves.”
On financial sector stability, Cardoso said most key financial soundness indicators remained within regulatory thresholds.
Of the 33 banks that have raised additional capital under the ongoing recapitalisation programme, 20 have met the new minimum capital requirement, reflecting what the committee described as “steady progress towards a more robust and well-capitalised financial system.”
The MPC reiterated “the strategic importance of the recapitalisation exercise” and urged the Bank to ensure its successful completion to reinforce resilience and support sustainable growth.
On output, the Purchasing Managers’ Index stood at 55.7 points in January 2026, indicating continued expansion in economic activity and likely improvement in fourth-quarter 2025 output.
Looking ahead, Cardoso said the outlook suggests that “the current momentum of domestic disinflation will continue in the near term,” supported by exchange rate stability and improved food supply.
However, he warned that “increased fiscal releases, including election-related spending, could pose upside risk to the outlook.”
He reaffirmed MPC’s commitment to “an evidence-based policy framework, firmly anchored on the Bank’s core mandate of ensuring price stability, while safeguarding the soundness and resilience of the financial system.”
The CBN governor also disclosed that the next MPC meeting is scheduled for May 19 and 20, 2026.
The move followed a 50-basis-point cut implemented in September 2025 and a hold at the previous MPC briefing in November 2025.
MPC’s decision to cut rates occurred as Nigeria’s headline inflation eased to 15.10% in January 2026.
